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Colgate Announces 4th Quarter and Full Year 2013 Results
Strong Organic Sales Growth Worldwide
Business Wire Colgate-Palmolive Company
1 hour ago
NEW YORK--(BUSINESS WIRE)--
Colgate-Palmolive Company (CL) today reported worldwide Net sales of $4,361 million in fourth quarter 2013, an increase of 2.0% versus fourth quarter 2012. Global unit volume grew 6.5%, pricing was even with the year ago quarter and foreign exchange was negative 4.5%. Organic sales (Net sales excluding foreign exchange, acquisitions and divestments) grew 6.5%.
Net income and Diluted earnings per share in fourth quarter 2013 were $564 million and $0.60, respectively. Net income in fourth quarter 2013 included $133 million ($0.15 per diluted share) of aftertax charges resulting from the implementation of the previously disclosed four-year Global Growth and Efficiency Program (the “2012 Restructuring Program”), a charge associated with an existing European competition law matter and costs associated with the sale of land in Mexico.
Net income and Diluted earnings per share in fourth quarter 2012 were $598 million and $0.63, respectively. Net income in fourth quarter 2012 included aftertax charges of $73 million ($0.07 per diluted share) resulting from the items described in Table 8.
Excluding the above noted items in both periods, Net income in fourth quarter 2013 was $697 million, an increase of 4% versus fourth quarter 2012, and Diluted earnings per share in fourth quarter 2013 was $0.75, an increase of 7% versus fourth quarter 2012.
Gross profit margin was 58.9% in fourth quarter 2013 versus 58.4% in the year ago quarter. Excluding the above noted items in both periods, Gross profit margin was 59.1% in fourth quarter 2013, an increase of 50 basis points versus the year ago quarter, as cost savings from the Company’s funding-the-growth initiatives more than offset higher raw and packaging material costs which included the impact of foreign exchange transaction costs.
Selling, general and administrative expenses were 37.0% of Net sales in fourth quarter 2013 versus 34.7% of Net sales in fourth quarter 2012. Excluding the above noted items in both periods, Selling, general and administrative expenses decreased by 10 basis points to 34.5% of Net sales in fourth quarter 2013, as an increase in advertising investment was more than offset by a decrease in overhead expenses, both as a percentage of Net sales. Worldwide advertising investment increased 3% versus the year ago quarter to $445 million.
Operating profit decreased 5% to $892 million in fourth quarter 2013 compared to $942 million in fourth quarter 2012. Excluding the above noted items in both periods, Operating profit increased 4% to $1,074 million.
Net cash provided by operations year to date was $3,204 million compared to $3,196 million in the comparable 2012 period, as strong operating earnings and a continued tight focus on working capital were offset by higher cash spending related to the 2012 Restructuring Program. Free cash flow before dividends (Net cash provided by operations less Capital expenditures) exceeded 100% of Net income. Working capital as a percentage of Net sales was 0.7%, even with the year ago period.
For the full year 2013, worldwide Net sales were $17,420 million, up 2.0% versus full year 2012. Global unit volume grew 5.0%, pricing increased 1.0% and foreign exchange was negative 4.0%. Organic sales grew 6.0%.
Net income and Diluted earnings per share for full year 2013 were $2,241 million and $2.38, respectively. Full year 2013 results include $424 million ($0.46 per diluted share) of aftertax charges resulting from the implementation of the 2012 Restructuring Program, the one-time charge relating to the remeasurement of the Venezuela balance sheet as a result of the currency devaluation in Venezuela, a charge associated with a European competition law matter and costs associated with the sale of land in Mexico.
Net income and Diluted earnings per share for full year 2012 were $2,472 million and $2.57, respectively. As previously disclosed, full year 2012 results included net aftertax charges of $102 million ($0.11 per diluted share) resulting from the items described in Table 9.
Excluding the items noted above in both periods, Net income for full year 2013 increased 4% versus full year 2012 and Diluted earnings per share increased 6% versus full year 2012.
Gross profit margin was 58.6% for full year 2013 versus 58.1% in full year 2012. Excluding the items noted above in both periods, Gross profit margin was 58.8% in full year 2013, up 50 basis points versus full year 2012, as higher pricing and cost savings from the Company’s funding-the-growth initiatives more than offset the impact of increases in raw and packaging material costs and foreign exchange transaction costs.
Ian Cook, Chairman, President and Chief Executive Officer, commented on the results and outlook excluding the 2013 and 2012 items noted above, “We are delighted to have ended the year with another quarter of strong growth on both the top and bottom lines. For the eleventh consecutive quarter, operating profit, net income and diluted earnings per share all increased versus the year ago period.
“The strong 6.5% organic sales growth was led by the emerging markets, where organic sales grew a robust 10.5%. Our strong top-line momentum should continue into 2014, fueled by new products across all categories and in all geographies.
“Pleasingly, the increase in gross profit margin during the quarter, combined with a reduction in overhead costs funded an increase in advertising spending behind Colgate’s brands, both absolutely and as a percent to sales, driving market share performance worldwide.
“Colgate’s leading global market shares in toothpaste and manual toothbrushes remain strong at 44.9% and 32.8%, respectively, on a year-to-date basis. We continue to make great progress in mouthwash as well, with our global market share in that category reaching a record high at 17.0% year to date, up 130 basis points versus prior year.
“Our 2012 Restructuring Program is on track and proceeding smoothly. We also continue to be sharply focused on our aggressive worldwide funding-the-growth programs and our strategic pricing initiatives.”
Mr. Cook concluded, “As we look ahead to 2014, based on the Company’s current growth momentum and our confidence in the strength of our global growth and efficiency program, we are planning for a year of gross margin expansion and strong earnings per share growth in line with the consensus of external analyst estimates, excluding charges related to the 2012 Restructuring Program. This takes into account recent movements in foreign exchange rates but excludes the impact of the recent economic announcements in Venezuela, which we are still evaluating.”
At 11:00 a.m. ET today, Colgate will host a conference call to elaborate on fourth quarter results. To access this call as a webcast, please go to Colgate’s web site at http://www.colgatepalmolive.com.
The following are comments about divisional performance for fourth quarter 2013 versus the year ago period. See attached Geographic Sales Analysis Percentage Changes and Segment Information schedules for additional information on divisional net sales and operating profit.
North America (18% of Company Sales)
North America Net sales increased 2.5% in fourth quarter 2013. Unit volume increased 4.0% with 1.0% lower pricing and 0.5% negative foreign exchange. Organic sales increased 3.0% during the quarter.
Operating profit in North America increased 5% in fourth quarter 2013 to $241 million, or 70 basis points to 31.2% of Net sales. This increase in Operating profit was primarily due to an increase in Gross profit, which was partially offset by an increase in Selling, general and administrative expenses, both as a percentage of Net sales. This increase in Gross profit was mainly driven by cost savings from the Company’s funding-the-growth initiatives, which were partially offset by higher raw and packaging material costs and lower pricing. This increase in Selling, general and administrative expenses was driven by increased advertising investment, which more than offset lower overhead expenses.
In the U.S., new product launches are contributing to volume growth across categories. Market share gains year to date were seen in manual toothbrushes, powered toothbrushes, mouthwash, dish liquids and fabric conditioners. In toothpaste, the success of Colgate Optic White and Colgate Optic White Dual Action toothpastes helped drive market share for the Colgate Optic White brand to 5.3% year to date, up 0.2 share points versus year ago. Strong sales of Colgate Total, Colgate Max Fresh Cool Scrub, Colgate Sensitive SmartFoam with Whitening and Tom’s of Maine toothpastes also contributed to volume growth in the quarter.
In manual toothbrushes, Colgate continued its brand market leadership with its market share in that category reaching a record 38.1% year to date, up 2.1 share points versus year ago. This success was driven by strong sales of Colgate 360° Optic White, Colgate 360° Total Advanced Floss Tip bristles, Colgate Extra Clean and Colgate Slim Soft manual toothbrushes.
Successful products driving volume growth in the U.S. in other categories include Colgate Total Advanced Pro-Shield and Colgate Optic White mouthwashes, Palmolive Soft Touch and Palmolive Lotus Blossom & Lavender dish liquids and Suavitel fabric conditioner.
Exciting new products planned for launch in first quarter 2014 include Colgate Optic White manual toothbrush + built-in whitening pen, Colgate Optic White Platinum Whiten and Protect toothpaste, Speed Stick Gear deodorants with new DryCore technology, Softsoap brand Décor Collection liquid hand soaps, Suavitel Fast Dry fabric conditioner and Palmolive Dish & Sink dish washing liquid.
Latin America (29% of Company Sales)
Latin America Net sales increased 1.0% in fourth quarter 2013. Unit volume increased 10.0% with 2.5% higher pricing and 11.5% negative foreign exchange. Volume gains were led by Venezuela, Brazil, Mexico and Colombia. Organic sales for Latin America increased 12.5% during the quarter.
Operating profit in Latin America increased 3% in fourth quarter 2013 to $363 million, or 50 basis points to 28.7% of Net sales. This increase in Operating profit was primarily due to a decrease in Selling, general and administrative expenses, which was partially offset by a decrease in Gross profit, both as a percentage of Net sales. This decrease in Gross profit was due to higher costs, primarily in Venezuela, which were partially offset by cost savings from the Company’s funding-the-growth initiatives and the benefits of pricing. This decrease in Selling, general and administrative expenses was due to lower overhead expenses and decreased advertising investment, the latter due to the timing of new product launches.
Colgate’s strong leadership in oral care throughout Latin America continued during the quarter with year-to-date toothpaste market share gains in Brazil, Chile, Uruguay, the Dominican Republic and Puerto Rico. Strong sales of Colgate Luminous White, Colgate Luminous White Advanced, Colgate Total Professional Gum Health and Colgate Maximum Cavity Protection plus Neutrazucar toothpastes drove volume growth throughout the region. Colgate strengthened its leadership of the manual toothbrush market throughout the region, driven by strong sales of Colgate 360° Luminous White, Colgate Triple Action and Colgate Premier Clean manual toothbrushes. In mouthwash, Colgate’s strong market share performance continues throughout the region, driven by the success of Colgate Luminous White, Colgate Plax Fresh Tea and Colgate Plax 2 in 1 mouthwashes.
Products in other categories contributing to volume growth include Protex Men, Protex Vitamin E, Palmolive Naturals Olive and Aloe and Palmolive Naturals Argan Oil bar soaps and Axion Oats dish liquid.
Europe/South Pacific (19% of Company Sales)
Europe/South Pacific Net sales decreased 0.5% in fourth quarter 2013. Unit volume increased 2.5% with 4.5% lower pricing and 1.5% positive foreign exchange. Excluding divested businesses, unit volume increased 3.0%. Volume gains in the United Kingdom, Australia and Poland more than offset volume declines in France and Germany. Organic sales for Europe/South Pacific decreased 1.5%.
Operating profit in Europe/South Pacific increased 7% in fourth quarter 2013 to $200 million, or 160 basis points to 23.7% of Net sales. This increase in Operating profit was primarily due to an increase in Gross profit, which was partially offset by an increase in Selling, general and administrative expenses, both as a percentage of Net sales. This increase in Gross profit was primarily driven by savings from the Company’s funding-the-growth initiatives, which were partially offset by lower pricing. This increase in Selling, general and administrative expenses was driven by increased advertising investment, which was partially offset by lower overhead expenses.
Colgate strengthened its oral care leadership in the Europe/South Pacific region with toothpaste share gains led by the United Kingdom, Switzerland, Poland, Germany, Austria, Czech Republic, the Netherlands, Croatia and Serbia. Successful premium products driving share gains include Colgate Max White One Luminous, Colgate Max Fresh ActiClean with SmartFoam and Colgate Total Pro Interdental toothpastes. In the manual toothbrush category, Colgate 360° Interdental and Colgate Slim Soft manual toothbrushes contributed to volume growth throughout the region.
Recent premium innovations contributing to volume growth in other product categories include Colgate Max White One and Colgate Plax Complete Care mouthwashes, Colgate ProClinical electric toothbrush, Sanex Surgras and Palmolive Mediterranean Moments shower gels, Palmolive Hygiene-Plus liquid hand soap, Paic Excel + dish liquid and Soupline Perfect Glide fabric conditioner.
Asia (14% of Company Sales)
Asia Net sales increased 4.5% during fourth quarter 2013. Unit volume increased 10.5% with 1.5% lower pricing and 4.5% negative foreign exchange. Volume gains were led by the Greater China region, India and the Philippines. Organic sales for Asia increased 9.0%.
Operating profit in Asia increased 14% in fourth quarter 2013 to $165 million, or 230 basis points to 28.8% of Net sales. This increase in Operating profit was primarily due to an increase in Gross profit and a decrease in Selling, general and administrative expenses, both as a percentage of Net sales. This increase in Gross profit was primarily due to cost savings from the Company’s funding-the-growth initiatives, partially offset by higher raw and packaging material costs, which included foreign exchange transaction costs, and lower pricing. This decrease in Selling, general and administrative expenses was primarily due to lower overhead expenses and decreased advertising investment, the latter due to the timing of new product launches.
Colgate strengthened its toothpaste leadership in Asia, driven by market share gains in India, China, Thailand, the Philippines and Singapore. Successful new products including Colgate Total Pro Gum Health, Colgate Optic White, Colgate Visible White, Colgate Active Salt Healthy White, Darlie Expert White and Colgate Max Fresh Tea toothpastes contributed to volume growth throughout the region.
Successful new products contributing to volume growth in other categories in the region include Colgate Slim Soft Charcoal and Colgate Slim Soft Raised Tip manual toothbrushes, Colgate Optic White, Colgate Plax Fruity Fresh and Darlie mouthwashes, Palmolive Naturals White + Milk bar soap, Protex Men Power shower gel and Palmolive Naturals Vibrant Color shampoo.
Africa/Eurasia (7% of Company Sales)
Africa/Eurasia Net sales increased 0.5% during fourth quarter 2013. Unit volume increased 6.0% with 1.0% higher pricing and 6.5% negative foreign exchange. Volume gains were led by Russia, the Sub-Saharan Africa region, Turkey and the Central Asia/Caucasus region. Organic sales for Africa/Eurasia increased 7.0%.
Operating profit in Africa/Eurasia increased 9% in fourth quarter 2013 to $76 million, or 170 basis points to 23.4% of Net sales. This increase in Operating profit was primarily due to an increase in Gross profit and a decrease in Selling, general and administrative expenses, both as a percentage of Net sales. This increase in Gross profit was primarily due to cost savings from the Company’s funding-the-growth initiatives and the benefits of pricing, partially offset by higher raw and packaging material costs, which included foreign exchange transaction costs. This decrease in Selling, general and administrative expenses was primarily due to lower overhead expenses which were partially offset by increased advertising investment.
Colgate continued its toothpaste leadership in Africa/Eurasia, driven by market share gains in Russia, South Africa, Turkey, Kenya, Saudi Arabia and Kuwait. Successful products contributing to volume growth in the region include Colgate Optic White, Colgate Altai Herbs, Colgate Total Pro Interdental and Colgate Maximum Cavity Protection plus Sugar Acid Neutralizer toothpastes, Colgate 360° Optic White and Colgate Slim Soft Charcoal manual toothbrushes, Colgate Optic White and Colgate Plax Herbal mouthwashes and Palmolive Gourmet Spa and Protex for Men shower gels.
Hill’s Pet Nutrition (13% of Company Sales)
Hill’s Net sales increased 4.5% during fourth quarter 2013. Unit volume increased 4.0% with 3.0% higher pricing and 2.5% negative foreign exchange. Volume gains in the U.S., Russia and Canada were partially offset by volume declines in Japan. Hill’s organic sales increased 7.0%.
Hill’s Operating profit increased 3% in fourth quarter 2013 to $153 million, while as a percentage of Net sales it decreased 50 basis points to 26.2% of Net sales. This decrease in Operating profit as a percentage of Net sales was primarily due to a decrease in Gross profit, which was partially offset by a decrease in Selling, general and administrative expenses, both as a percentage of Net sales. This decrease in Gross profit was primarily driven by higher raw and packaging material costs, due in part to formulation changes and foreign exchange transaction costs, which were partially offset by cost savings from the Company’s funding-the-growth initiatives and the benefit of pricing. This decrease in Selling, general and administrative expenses was due to lower overhead expenses and decreased advertising investment, the latter due to timing of new product launches.
New product introductions driving volume growth in the U.S. include the recent successful launch of our natural pet food brand, Hill’s Ideal Balance, with natural ingredients perfectly balanced.
New product introductions driving volume growth globally include the launch of breakthrough weight loss nutrition, Hill’s Prescription Diet Metabolic, and the relaunch of Hill’s Science Diet with natural ingredients and improved taste.
Exciting new products planned for launch in first quarter 2014 include Hill’s Ideal Balance Active and Slim & Healthy, Hill’s Science Diet Grain Free, Perfect Weight and Sensitive Stomach and Skin, and Hill’s Prescription Diet c/d Urinary Stress.
***
About Colgate-Palmolive: Colgate-Palmolive is a leading global consumer products company, tightly focused on Oral Care, Personal Care, Home Care and Pet Nutrition. Colgate sells its products in over 200 countries and territories around the world under such internationally recognized brand names as Colgate, Palmolive, Speed Stick, Lady Speed Stick, Softsoap, Irish Spring, Protex, Sorriso, Kolynos, elmex, Tom’s of Maine, Sanex, Ajax, Axion, Fabuloso, Soupline and Suavitel, as well as Hill’s Science Diet, Hill’s Prescription Diet and Hill’s Ideal Balance. For more information about Colgate’s global business, visit the Company’s web site at http://www.colgatepalmolive.com. To learn more about Colgate Bright Smiles, Bright Futures® oral health education program, please visit http://www.colgatebsbf.com. CL-E
The Company’s annual meeting of shareholders is currently scheduled for Friday, May 9, 2014.
Market Share Information
Management uses market share information as a key indicator to monitor business health and performance. References to market share in this press release are based on a combination of consumption and market share data provided by third-party vendors, primarily Nielsen, and internal estimates. All market share references represent the percentage of the dollar value of sales of our products, relative to all product sales in the category in the countries in which the Company competes and purchases data. Market share data is subject to limitations on the availability of up-to-date information. We believe that the third-party vendors we use to provide data are reliable, but we have not verified the accuracy or completeness of the data or any assumptions underlying the data. In addition, market share information calculated by the Company may be different from market share information calculated by other companies due to differences in category definitions, the use of data from different countries, internal estimates and other factors.
Cautionary Statement on Forward-Looking Statements
This press release and the related webcast may contain forward-looking statements. Such statements may relate, for example, to sales or volume growth, organic sales growth, profit or profit margin growth, earnings growth, financial goals, the impact of currency devaluations, exchange controls, price controls and labor unrest, including in Venezuela, cost-reduction plans including the 2012 Restructuring Program, tax rates, new product introductions or commercial investment levels. These statements are made on the basis of our views and assumptions as of this time and we undertake no obligation to update these statements. We caution investors that any such forward-looking statements are not guarantees of future performance and that actual events or results may differ materially from those statements. Investors should consult the Company’s filings with the Securities and Exchange Commission (including the information set forth under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012) for information about certain factors that could cause such differences. Copies of these filings may be obtained upon request from the Company’s Investor Relations Department or on the Company’s web site at http://www.colgatepalmolive.com.
Non-GAAP Financial Measures
The following provides information regarding the non-GAAP financial measures used in this earnings release and/or the related webcast:
This release discusses organic sales growth, which is Net sales growth excluding the impact of foreign exchange, acquisitions and divestments. Management believes this measure provides investors with useful supplemental information regarding the Company’s underlying sales trends by presenting sales growth excluding the external factor of foreign exchange as well as the impact from acquisitions and divestments. See “Geographic Sales Analysis Percentage Changes” for the three and twelve months ended December 31, 2013 vs 2012 included with this release for a comparison of organic sales growth to sales growth in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
To supplement Colgate’s Condensed Consolidated Income Statements presented in accordance with GAAP, the Company has disclosed non-GAAP measures of operating results that exclude certain items. Worldwide Gross profit, Gross profit margin, Selling, general and administrative expenses, Selling, general and administrative expenses as a percentage of Net sales, Other (income) expense, net, Operating profit, Operating profit margin, Net income attributable to Colgate-Palmolive Company and Diluted earnings per common share are discussed both as reported (on a GAAP basis) and, as applicable, excluding charges resulting from the implementation of the 2012 Restructuring Program, the one-time charge resulting from the Venezuela devaluation, a charge associated with a European competition law matter, costs related to the sale of land in Mexico and costs associated with various business realignment and other cost-saving initiatives (non-GAAP). Management believes these non-GAAP financial measures provide investors with useful supplemental information regarding the performance of the Company’s ongoing operations. See “Non-GAAP Reconciliations” for the three and twelve months ended December 31, 2013 and 2012 included with this release for a reconciliation of these financial measures to the related GAAP measures.
The Company uses these financial measures internally in its budgeting process and as factors in determining compensation. While the Company believes that these financial measures are useful in evaluating the Company’s business, this information should be considered as supplemental in nature and is not meant to be considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not be the same as similar measures presented by other companies.
The Company defines free cash flow before dividends as Net cash provided by operations less Capital expenditures. As management uses this measure to evaluate the Company’s ability to satisfy current and future obligations, repurchase stock, pay dividends and fund future business opportunities, the Company believes that it provides useful information to investors. Free cash flow before dividends is not a measure of cash available for discretionary expenditures since the Company has certain non-discretionary obligations such as debt service that are not deducted from the measure. Free cash flow before dividends is not a GAAP measurement and may not be comparable to similarly titled measures reported by other companies. See “Condensed Consolidated Statements of Cash Flows” for the twelve months ended December 31, 2013 and 2012 for a comparison of free cash flow before dividends to Net cash provided by operations as reported in accordance with GAAP.
(See attached tables for fourth quarter results.)
Table 1
Colgate-Palmolive Company
Condensed Consolidated Income Statements
For the Three Months Ended December 31, 2013 and 2012
(Dollars in Millions Except Per Share Amounts) (Unaudited)
2013 2012
Net sales $ 4,361 $ 4,286
Cost of sales 1,794 1,781
Gross profit 2,567 2,505
Gross profit margin 58.9% 58.4%
Selling, general and administrative expenses 1,612 1,487
Other (income) expense, net 63 76
Operating profit 892 942
Operating profit margin 20.5% 22.0%
Interest (income) expense, net (1) (5)
Income before income taxes 893 947
Provision for income taxes 292 311
Effective tax rate 32.7% 32.8%
Net income including noncontrolling interests 601 636
Less: Net income attributable to noncontrolling interests 37 38
Net income attributable to Colgate-Palmolive Company $ 564 $ 598
Earnings per common share
Basic $ 0.61 $ 0.63
Diluted $ 0.60 $ 0.63
Average common shares outstanding
Basic 925.7 944.0
Diluted 935.3 952.1
Table 2
Colgate-Palmolive Company
Condensed Consolidated Income Statements
For the Twelve Months Ended December 31, 2013 and 2012
(Dollars in Millions Except Per Share Amounts) (Unaudited)
2013 2012
Net sales $ 17,420 $ 17,085
Cost of sales 7,219 7,153
Gross profit 10,201 9,932
Gross profit margin 58.6% 58.1%
Selling, general and administrative expenses 6,223 5,930
Other (income) expense, net 422 113
Operating profit 3,556 3,889
Operating profit margin 20.4% 22.8%
Interest (income) expense, net (9) 15
Income before income taxes 3,565 3,874
Provision for income taxes 1,155 1,243
Effective tax rate 32.4% 32.1%
Net income including noncontrolling interests 2,410 2,631
Less: Net income attributable to noncontrolling interests 169 159
Net income attributable to Colgate-Palmolive Company $ 2,241 $ 2,472
Earnings per common share
Basic $ 2.41 $ 2.60
Diluted $ 2.38 $ 2.57
Average common shares outstanding
Basic 930.8 952.1
Diluted 939.9 960.2
Table 3
Colgate-Palmolive Company
Condensed Consolidated Balance Sheets
As of December 31, 2013 and 2012
(Dollars in Millions) (Unaudited)
December 31, December 31,
2013 2012
Cash and cash equivalents $ 962 $ 884
Receivables, net 1,636 1,668
Inventories 1,425 1,365
Other current assets 799 639
Property, plant and equipment, net 4,083 3,842
Other assets, including goodwill and intangibles 4,971 4,996
Total assets $ 13,876 $ 13,394
Total debt $ 5,657 $ 5,230
Other current liabilities 3,562 3,432
Other non-current liabilities 2,121 2,342
Total liabilities 11,340 11,004
Total Colgate-Palmolive Company shareholders' equity 2,305 2,189
Noncontrolling interests 231 201
Total liabilities and shareholders' equity $ 13,876 $ 13,394
Supplemental Balance Sheet Information
Debt less cash, cash equivalents and marketable securities* $ 4,522 $ 4,230
Working capital % of sales 0.7 % 0.7 %
* Marketable securities of $173 and $116 as of December 31, 2013 and 2012, respectively, are included in Other current assets.
Table 4
Colgate-Palmolive Company
Condensed Consolidated Statements of Cash Flows
For the Twelve Months Ended December 31, 2013 and 2012
(Dollars in Millions) (Unaudited)
2013 2012
Operating Activities
Net income including noncontrolling interests $ 2,410 $ 2,631
Adjustments to reconcile net income including noncontrolling interests to net cash provided by operations:
Depreciation and amortization 439 425
Restructuring and termination benefits, net of cash 182 35
Voluntary benefit plan contributions (101 ) (101 )
Stock-based compensation expense 128 120
Venezuela devaluation charge 172 -
Deferred income taxes 71 63
Cash effects of changes in:
Receivables (37 ) 19
Inventories (97 ) (21 )
Accounts payable and other accruals 24 (5 )
Other non-current assets and liabilities 13 30
Net cash provided by operations 3,204 3,196
Investing Activities
Capital expenditures (670 ) (565 )
Sale of property and non-core product lines 15 72
Purchases of marketable securities and investments (505 ) (545 )
Proceeds from sale of marketable securities and investments 267 147
Payment for acquisitions, net of cash acquired (3 ) (29 )
Other 6 55
Net cash used in investing activities (890 ) (865 )
Financing Activities
Principal payments on debt (7,554 ) (5,011 )
Proceeds from issuance of debt 7,976 5,452
Dividends paid (1,382 ) (1,277 )
Purchases of treasury shares (1,521 ) (1,943 )
Proceeds from exercise of stock options and excess tax benefits 339 478
Net cash used in financing activities (2,142 ) (2,301 )
Effect of exchange rate changes on Cash and cash equivalents (94 ) (24 )
Net increase (decrease) in Cash and cash equivalents 78 6
Cash and cash equivalents at beginning of period 884 878
Cash and cash equivalents at end of period $ 962 $ 884
Supplemental Cash Flow Information
Free cash flow before dividends (Net cash provided by operations less Capital expenditures)
Net cash provided by operations $ 3,204 $ 3,196
Less: Capital expenditures (670 ) (565 )
Free cash flow before dividends $ 2,534 $ 2,631
Income taxes paid $ 1,087 $ 1,280
Table 5
Colgate-Palmolive Company
Segment Information
For the Three and Twelve Months Ended December 31, 2013 and 2012
(Dollars in Millions) (Unaudited)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2013 2012 2013 2012
Net sales
Oral, Personal and Home Care
North America $ 772 $ 754 $ 3,072 $ 2,971
Latin America 1,265 1,255 5,012 5,032
Europe/South Pacific 844 848 3,396 3,417
Asia 572 547 2,472 2,264
Africa/Eurasia 325 323 1,257 1,241
Total Oral, Personal and Home Care 3,778 3,727 15,209 14,925
Pet Nutrition 583 559 2,211 2,160
Total Net sales $ 4,361 $ 4,286 $ 17,420 $ 17,085
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2013 2012 2013 2012
Operating profit
Oral, Personal and Home Care
North America $ 241 $ 230 $ 927 $ 810
Latin America 363 354 1,385 1,454
Europe/South Pacific
200 187 805 747
Asia 165 145 698 619
Africa/Eurasia 76 70 268 267
Total Oral, Personal and Home Care 1,045 986 4,083 3,897
Pet Nutrition 153 149 563 589
Corporate(1) (306 ) (193 ) (1,090 ) (597 )
Total Operating Profit $ 892 $ 942 $ 3,556 $ 3,889
Note:
(1) Corporate operations includes costs related to stock options and restricted stock awards, research and development costs, Corporate overhead costs, restructuring and related implementation costs and gains and losses on sales of non-core product lines and assets.
Corporate Operating profit (loss) for the three months ended December 31, 2013 includes costs of $173 associated with the 2012 Restructuring Program, a charge of $5 for a competition law matter in France related to the home care and personal care sectors and costs of $4 related to the sale of land in Mexico. For the three months ended December 31, 2012, Corporate Operating profit (loss) included costs of $89 associated with the 2012 Restructuring Program and costs of $4 related to the sale of land in Mexico.
Corporate Operating profit (loss) for the twelve months ended December 31, 2013 includes costs of $371 associated with the 2012 Restructuring Program, a one-time $172 charge for the impact of the devaluation in Venezuela, a charge of $23 for a competition law matter in France related to the home care and personal care sectors and costs of $18 related to the sale of land in Mexico. For the twelve months ended December 31, 2012, Corporate Operating profit (loss) included costs of $89 associated with the 2012 Restructuring Program, costs of $24 related to the sale of land in Mexico and costs of $21 associated with various business realignment and other cost-saving initiatives.
Table 6
Colgate-Palmolive Company
Geographic Sales Analysis Percentage Changes
For the Three Months Ended December 31, 2013 vs 2012
(Unaudited)
COMPONENTS OF SALES CHANGE
Pricing
Coupons
Sales 3 Months Consumer &
Change Organic As Reported Organic Ex-Divested Trade Foreign
Region
As Reported
Sales Change
Volume
Volume
Volume
Incentives
Exchange
Total Company 2.0 % 6.5 % 6.5 % 6.5 % 6.5 % - % (4.5)%
Europe/South Pacific (0.5)% (1.5)% 2.5 % 3.0 % 3.0 % (4.5)% 1.5 %
Latin America 1.0 % 12.5 % 10.0 % 10.0 % 10.0 % 2.5 % (11.5)%
Asia 4.5 % 9.0 % 10.5 % 10.5 % 10.5 % (1.5)% (4.5)%
Africa/Eurasia 0.5 % 7.0 % 6.0 % 6.0 % 6.0 % 1.0 % (6.5)%
Total International 1.0 % 7.0 % 7.5 % 7.5 % 7.5 % (0.5)% (6.0)%
North America 2.5 % 3.0 % 4.0 % 4.0 % 4.0 % (1.0)% (0.5)%
Total CP Products 1.5 % 6.5 % 7.0 % 7.0 % 7.0 % (0.5)% (5.0)%
Hill's 4.5 % 7.0 % 4.0 % 4.0 % 4.0 % 3.0 % (2.5)%
Emerging Markets (1) 2.0 % 10.5 % 9.5 % 9.5 % 9.5 % 1.0 % (8.5)%
Developed Markets 1.0 % 2.0 % 3.0 % 3.5 % 3.5 % (1.5)% (0.5)%
Notes:
(1) Emerging Markets include Latin America, Asia (excluding Japan), Africa/Eurasia and Central Europe.
Table 7
Colgate-Palmolive Company
Geographic Sales Analysis Percentage Changes
For the Twelve Months Ended December 31, 2013 vs 2012
(Unaudited)
COMPONENTS OF SALES CHANGE
Pricing
Coupons
Sales 12 Months Consumer &
Change Organic As Reported Organic Ex-Divested Trade Foreign
Region
As Reported
Sales Change
Volume
Volume
Volume
Incentives
Exchange
Total Company 2.0 % 6.0 % 5.0 % 5.0 % 5.0 % 1.0 % (4.0)%
Europe/South Pacific (0.5)% (0.5)% 1.5 % 2.0 % 2.0 % (2.5)% 0.5 %
Latin America (0.5)% 9.5 % 5.5 % 6.0 % 6.0 % 3.5 % (9.5)%
Asia 9.0 % 10.5 % 10.5 % 10.5 % 10.5 % - % (1.5)%
Africa/Eurasia 1.5 % 7.0 % 8.0 % 8.0 % 8.0 % (1.0)% (5.5)%
Total International 1.5 % 6.5 % 6.0 % 6.0 % 6.0 % 0.5 % (5.0)%
North America 3.5 % 3.5 % 3.5 % 3.5 % 3.5 % - % - %
Total CP Products 2.0 % 6.0 % 5.5 % 5.5 % 5.5 % 0.5 % (4.0)%
Hill's 2.5% 5.0 % 1.5 % 1.5 % 1.5 % 3.5 % (2.5)%
Emerging Markets (1) 3.0 % 9.5 % 8.0 % 8.0 % 8.0 % 1.5 % (6.5)%
Developed Markets 1.0 % 2.0 % 1.5 % 2.0 % 2.0 % - % (0.5)%
Notes:
(1) Emerging Markets include Latin America, Asia (excluding Japan), Africa/Eurasia and Central Europe.
Table 8
Colgate-Palmolive Company
Non-GAAP Reconciliations
For the Three Months Ended December 31, 2013 and 2012
(Dollars in Millions Except Per Share Amounts) (Unaudited)
Gross Profit 2013 2012
Gross profit, GAAP $ 2,567 $ 2,505
2012 Restructuring Program 6 2
Costs related to the sale of land in Mexico 4 4
Gross profit, non-GAAP $ 2,577 $ 2,511
Basis Point
Gross Profit Margin 2013 2012 Change
Gross profit margin, GAAP 58.9 % 58.4 % 50
2012 Restructuring Program 0.1 % 0.1 %
Costs related to the sale of land in Mexico 0.1 % 0.1 %
Gross profit margin, non-GAAP 59.1 % 58.6 % 50
Selling, General and Administrative Expenses 2013 2012
Selling, general and administrative expenses, GAAP $ 1,612 $ 1,487
2012 Restructuring Program (106 ) (6 )
Selling, general and administrative expenses, non-GAAP $ 1,506 $ 1,481
Basis Point
Selling, General and Administrative Expenses as a Percentage of Net Sales 2013 2012 Change
Selling, general and administrative expenses as a percentage of Net sales, GAAP 37.0 % 34.7 % 230
2012 Restructuring Program (2.5 %) (0.1 )%
Selling, general and administrative expenses as a percentage of Net sales, non-GAAP 34.5 % 34.6 % (10 )
Other (Income) Expense, Net 2013 2012
Other (income) expense, net, GAAP $ 63 $ 76
2012 Restructuring Program (61 ) (81 )
Charge for a French competition law matter (5 ) -
Other (income) expense, net, non-GAAP $ (3 ) $ (5 )
Operating Profit 2013 2012 % Change
Operating profit, GAAP $ 892 $ 942 (5 %)
2012 Restructuring Program 173 89
Charge for a French competition law matter 5 -
Costs related to the sale of land in Mexico 4 4
Operating profit, non-GAAP $ 1,074 $ 1,035 4 %
Basis Point
Operating Profit Margin 2013 2012 Change
Operating profit margin, GAAP 20.5 % 22.0 % (150 )
2012 Restructuring Program 3.9 % 2.0 %
Charge for a French competition law matter 0.1 % -
Costs related to the sale of land in Mexico 0.1 % 0.1 %
Operating profit margin, non-GAAP 24.6 % 24.1 % 50
Net Income Attributable to Colgate-Palmolive Company 2013 2012 % Change
Net income attributable to Colgate-Palmolive Company, GAAP $ 564 $ 598 (6 %)
2012 Restructuring Program 125 70
Charge for a French competition law matter 5 -
Costs related to the sale of land in Mexico 3 3
Net income attributable to Colgate-Palmolive Company, non-GAAP $ 697 $ 671 4 %
Earnings Per Common Share, Diluted (1) (2) 2013 2012 % Change
Diluted earnings per common share, GAAP $ 0.60 $ 0.63 (5 %)
2012 Restructuring Program 0.14 0.07
Charge for a French competition law matter 0.01 -
Costs related to the sale of land in Mexico - -
Diluted earnings per common share, non-GAAP $ 0.75 $ 0.70 7 %
(1) The impact of non-GAAP adjustments on the diluted earnings per share may not necessarily equal the difference between "GAAP" and "non-GAAP" as a result of rounding.
(2) As a result of the two-for-one stock split, effective May 15, 2013, all historical per share data and number of shares were retroactively adjusted. Diluted earnings per share were computed independently for each quarter presented.
Table 9
Colgate-Palmolive Company
Non-GAAP Reconciliations
For the Twelve Months Ended December 31, 2013 and 2012
(Dollars in Millions Except Per Share Amounts) (Unaudited)
Gross Profit 2013 2012
Gross profit, GAAP $ 10,201 $ 9,932
2012 Restructuring Program 32 2
Costs related to the sale of land in Mexico 15 24
Business realignment and other cost-saving initiatives - 5
Gross profit, non-GAAP $ 10,248 $ 9,963
Basis Point
Gross Profit Margin 2013 2012 Change
Gross profit margin, GAAP 58.6 % 58.1 % 50
2012 Restructuring Program 0.2 % -
Costs related to the sale of land in Mexico - 0.2 %
Gross profit margin, non-GAAP 58.8 % 58.3 % 50
Selling, General and Administrative Expenses 2013 2012
Selling, general and administrative expenses, GAAP $ 6,223 $ 5,930
2012 Restructuring Program (137 ) (6 )
Business realignment and other cost-saving initiatives - (14 )
Selling, general and administrative expenses, non-GAAP $ 6,086 $ 5,910
Basis Point
Selling, General and Administrative Expenses as a Percentage of Net Sales 2013 2012 Change
Selling, general and administrative expenses as a percentage of Net sales, GAAP 35.7 % 34.7 % 100
2012 Restructuring Program (0.8 %) -
Business realignment and other cost-saving initiatives - (0.1 %)
Selling, general and administrative expenses as a percentage of Net sales, non-GAAP 34.9 % 34.6 % 30
Other (Income) Expense, Net 2013 2012
Other (income) expense, net, GAAP $ 422 $ 113
2012 Restructuring Program (202 ) (81 )
Venezuela devaluation charge (172 ) -
Charge for a French competition law matter (23 ) -
Costs related to the sale of land in Mexico (3 ) -
Business realignment and other cost-saving initiatives - (2 )
Other (income) expense, net, non-GAAP $ 22 $ 30
Operating Profit 2013 2012 % Change
Operating profit, GAAP $ 3,556 $ 3,889 (9 %)
2012 Restructuring Program 371 89
Venezuela devaluation charge 172 -
Charge for a French competition law matter 23 -
Costs related to the sale of land in Mexico 18 24
Business realignment and other cost-saving initiatives - 21
Operating profit, non-GAAP $ 4,140 $ 4,023 3 %
Basis Point
Operating Profit Margin 2013 2012 Change
Operating profit margin, GAAP 20.4 % 22.8 % (240 )
2012 Restructuring Program 2.2 % 0.5 %
Venezuela devaluation charge 1.0 % -
Charge for a French competition law matter 0.1 % -
Costs related to the sale of land in Mexico 0.1 % 0.1 %
Business realignment and other cost-saving initiatives - 0.1 %
Operating profit margin, non-GAAP 23.8 % 23.5 % 30
Net Income Attributable to Colgate-Palmolive Company 2013 2012 % Change
Net income attributable to Colgate-Palmolive Company, GAAP $ 2,241 $ 2,472 (9 %)
2012 Restructuring Program 278 70
Venezuela devaluation charge 111 -
Charge for a French competition law matter 23 -
Costs related to the sale of land in Mexico 12 18
Business realignment and other cost-saving initiatives - 14
Net income attributable to Colgate-Palmolive Company, non-GAAP $ 2,665 $ 2,574 4 %
Earnings Per Common Share, Diluted (1) (2) 2013 2012 % Change
Diluted earnings per common share, GAAP $ 2.38 $ 2.57 (7 %)
2012 Restructuring Program 0.30 0.07
Venezuela devaluation charge 0.12 -
Charge for a French competition law matter 0.03 -
Costs related to the sale of land in Mexico 0.01 0.02
Business realignment and other cost-saving initiatives - 0.02
Diluted earnings per common share, non-GAAP $ 2.84 $ 2.68 6 %
(1) The impact of non-GAAP adjustments on the diluted earnings per share may not necessarily equal the difference between "GAAP" and "non-GAAP" as a result of rounding.
(2) As a result of the two-for-one stock split, effective May 15, 2013, all historical per share data and number of shares were retroactively adjusted. Diluted earnings per share were computed independently for each quarter and the year to date period presented. As a result of the stock split, changes in shares outstanding during the year and rounding, the sum of the quarters' earnings per share may not necessarily equal the earnings per share for the year to date period.
Contact:
Colgate-Palmolive Company
Bina Thompson, 212-310-3072
Hope Spiller, 212-310-2291
The "Street has WYNN coming in at 1.76 for the 4th quarter that should be reported on or about January 30, 2014! All post's welcome! The "Good Dr's In"!
The "Street has WYNN coming in at 1.76 for the 4th quarter that should be reported on or about January 30, 2014! All post's welcome! The "Good Dr's In"!
The "Street has WYNN coming in at 1.76 for the 4th quarter that should be reported on or about January 30, 2014! All post's welcome! The "Good Dr's In"!
Tupperware Brands Reports Record Fourth Quarter and Full Year Results; Raises Quarterly Dividend 10%
-- Fourth quarter sales up 1% in U.S. dollars and 5% local currency+ versus last year.
-- GAAP diluted E.P.S. $1.74, versus $1.34 last year. Adjusted*, diluted E.P.S. $1.81, up 12% in local currency.
-- Full year cash flow before investing activities $263 million, up 13% versus last year.
-- Share repurchases of $75 million / 832 thousand shares.
-- Board of Directors declares a 10% higher quarterly dividend of 68 cents per share, $2.72 annual run rate.
PR Newswire Tupperware Brands Corporation
2 hours ago
ORLANDO, Fla., Jan. 29, 2014 /PRNewswire/ -- (TUP) Tupperware Brands Corporation today announced record fourth quarter and full year 2013 operating results.
Rick Goings, Chairman and CEO, commented, "We continued to deliver steady top line growth in the quarter. Focusing on our sales force remains our top priority, as increasing its size is key to delivering consistent growth in our business. We had a meaningful sequential increase in total sellers in the quarter, closing the year with 2.9 million worldwide, a 4% increase over the end of 2012. Worldwide, our local management teams have the expertise to drive strategic initiatives in their business units in order to motivate our sales force, and we achieved a sequential improvement as well in the active seller comparison in the quarter. Even with challenging environmental conditions and macro-economic factors in several of our emerging markets, as a group, these markets delivered solid sales growth in local currency, being up 12% over last year. An integral part of our "And" story, our established markets, while down in total, improved sequentially versus the prior quarter, and several of these markets reported growth as key strategies caught hold."
Goings continued, "As we look to 2014, we remain focused on providing a good return to our investors, while continuing to invest at appropriate levels in our business units. Along these lines we're pleased to announce that based on the strength of our results and management teams around the world, and confidence in our continued growth, our Board approved today a 10% increase in our quarterly dividend. We will also continue with our share repurchase program, and anticipate $185 million worth of open-market share repurchases in 2014."
Fourth Quarter Executive Summary
Fourth quarter 2013 net sales were $717 million. Emerging markets**, accounting for 63% of sales, achieved a 12% increase in local currency, driven by large populations, greater penetration and emerging middle classes. Established markets were down 5% in local currency, a 3 percentage point improvement over the third quarter.
GAAP net income of $89.7 million versus $74.5 million in the prior year, which included $13.2 million pretax more of expense "items", was up 21% in dollars and 29% in local currency. Adjusted diluted E.P.S. of $1.81 included 9 cents of negative impact versus 2012 from changes in foreign exchange rates, which was 3 cents worse than assumed in October's guidance.
Full year cash flow from operating activities net of investing activities was $263 million, $29 million over 2012 and $13 million over the high end of October's guidance range.
In the fourth quarter, the Company returned $107 million to shareholders through a dividend payout of $32 million and the repurchase of 832 thousand shares for $75 million. Since 2007, 20 million shares have been repurchased for $1.2 billion, with $0.8 billion left under an authorization that runs until February 2017.
Total sales force of 2.9 million was up 4% versus prior year at the end of the quarter, a 4 percentage point improvement over third quarter, with improvement in most markets.
Fourth Quarter Business Highlights
Europe: Continued strong results in Turkey, and Tupperware South Africa's and France's return to growth, offset by impact of low activity primarily in other established markets and CIS
Segment sales, down 1% versus last year reported and down 2% in local currency.
Emerging markets were up 2% in local currency. Primarily driven by Turkey, up 24%, and Tupperware South Africa, up 28%, largely offset by the CIS, down 31%.
Established markets were down 4% in local currency, a 7 percentage point improvement over the third quarter. France's local currency sales were up 2%, reflecting an increase in sales force size and activity. This was largely offset by Germany, which was down 14%, the result of a less active and productive sales force. Successful recruiting resulted in Germany ending the quarter with a 5% sales force advantage.
Asia Pacific: Indonesia, China and Malaysia/Singapore sales up double digit
Sales for the segment up 1% reported and 12% in local currency, driven by the emerging markets up 17% in local currency, led by China up over 20%, Indonesia, up 33% and Malaysia Singapore up 17%. In line with prior quarter, India was only up slightly versus historical double digit increases. Continued focus on mitigating macroeconomic factors in India, as well as focusing top end sales force leaders on recruiting, training and activating sales force members.
Established markets in the segment were down 3% in local currency, as they continued to execute strategies to stabilize and improve sales force and sales force leadership levels.
Active sales force up 5%. The 7 percentage point difference between the sales and active seller comparisons was primarily related to productivity improvement in Indonesia related to higher sales force standards and China due to product mix, as well as from a mix shift toward units with higher average order size.
Tupperware North America: Tupperware Mexico up 14%, including 8-point benefit from higher B2B sales
Segment sales, up 4% reported and in local currency. Tupperware Mexico sales up 14%, reflected a larger and more productive sales force, as well as higher B2B sales, which had a 4 percentage point benefit on the sales comparison for the whole segment.
Tupperware United States and Canada sales were down 3% in local currency. The focus continued on building and strengthening the sales force structure and leadership levels resulting in a higher ending sales force size versus prior quarter.
Beauty North America: Continued focus on executing and leveraging recently implemented programs
Sales for the segment were down 14% reported and 13% in local currency. In line with third quarter, Fuller Mexico sales were down 11% in local currency. Continued focus on stabilizing and growing sales manager level and total sales force size. Sales force size and activity comparisons were slightly better than third quarter, but sales force productivity was down.
BeautiControl sales were down 23%. Sales force size improved through the quarter, but still down high single digit. Through engagement of the top end of the sales force, there is a continuing focus on developing a larger and more active sales force and executing on the programs in place.
South America: Continued good recruiting resulted in 18% sales force increase
Sales up 17% reported and 28% in local currency, primarily as a result of continued growth in Brazil which was up 19% in local currency driven by a larger sales force size. Venezuela was up 54% primarily reflecting higher prices due to inflation.
Active sales force up 5%. The 23 point difference between the sales and active seller comparisons primarily reflected the ongoing strategies to increase average order size in Argentina and inflation related price increases, along with higher sales volume in Brazil.
2014 Outlook (Unaudited)
Based on current business trends and foreign currency rates, the Company's first quarter and full year 2014 guidance is provided below.
Company Level
13 Weeks Ended
13 Weeks
52 Weeks Ended
52 Weeks
March 29, 2014
Ended
Dec 27, 2014
Ended
Low
High
Mar 30, 2013
Low
High
Dec 28, 2013
USD Sales Growth vs Prior
Year
(3)
%
(1)
%
4
%
0
%
2
%
3
%
GAAP EPS
$1.08
$1.13
$1.06
$5.20
$5.35
$5.17
GAAP Pre-Tax ROS
11.3
%
11.7
%
11.8
%
13.2
%
13.3
%
13.5
%
Local Currency+ Sales Growth
vs Prior Year
5
%
7
%
6
%
5
%
7
%
6
%
EPS Excluding Items*
$1.13
$1.18
$1.18
$5.51
$5.66
$5.43
Pre-Tax ROS Excluding Items
11.9
%
12.3
%
12.8
%
14.0
%
14.1
%
14.1
%
FX Impact on EPS Excluding
Items Comparison(a)
($0.14)
($0.14)
($0.44)
($0.44)
(a)
Impact of changes in foreign currency versus prior year are updated monthly and posted on: http://ir.tupperwarebrands.com/foreign-exchange-impact.cfm.
Full year 2014
Net interest expense is expected to be around $40 million.
Tax rate excluding items is expected to be 25.0%, excluding items and 24.9% on a U.S. GAAP basis.
Reflects $185 million and first quarter reflects $10 million in open market share repurchases.
Diluted earnings per share guidance assumes no change in the current 6.3 bolivar to dollar rate for Venezuela. If the rate had worsened to 63 bolivars to the dollar as of the beginning of 2014, there would have been an estimated $40 million negative pretax impact on 2014 earnings related to amounts on the year end 2013 balance sheet, and an additional $25 million negative pretax impact versus 2013 from translating operating activity at the worse rate. The estimated impact of such a devaluation on 2014 sales is estimated at $100 million.
Segment Level
For the full year, sales in local currency are expected to be even to up a couple percent in Europe, up high-single to low-double digit in Asia Pacific, up mid-single digit in the Tupperware North America segment, down mid-single digit in Beauty North America and to be up about 20% percent in the South America segment.
Pre-tax return on sales without items for the full year, versus 2013, is expected to increase modestly in all segments, except in Beauty North America where a decrease is expected associated with negative volume leverage.
Uses of Cash
Dividends
The Company's Board of Directors declared today the Company's regular quarterly dividend. The dividend declared was 68 cents per share, up 10% from the previous quarter. It is payable on April 4, 2014 to shareholders of record as of March 19, 2014. This increase in dividend is in line with maintaining a targeted payout ratio of approximately 50% of trailing diluted earnings per share without items.
* See Non-GAAP Financial Measures Reconciliation Schedules.
** The Company classifies Established Market Units as those operating in Western Europe (including Scandinavia), the United States, Canada, Australia and Japan and its remaining units as Emerging Market Units.
+ Local currency changes are measured by comparing current year results with those of the prior year translated at the current year's foreign exchange rates.
Fourth Quarter Earnings Conference Call
Tupperware Brands will conduct a conference call and simultaneous webcast presentation including slides today, Wednesday, January 29, 2014, at 8:30 am Eastern time. The conference call and slides will be webcast and accessible, along with a copy of this news release, on www.tupperwarebrands.com.
Tupperware Brands Corporation is a portfolio of global direct selling companies, selling innovative, premium products across multiple brands and categories through an independent sales force of 2.9 million. Product brands and categories include design-centric preparation, storage and serving solutions for the kitchen and home through the Tupperware brand and beauty and personal care products for consumers through the Armand Dupree, Avroy Shlain, BeautiControl, Fuller Cosmetics, NaturCare, Nutrimetics, and Nuvo brands.
The Company's stock is listed on the New York Stock Exchange (TUP). Statements contained in this release, which are not historical fact and use predictive words such as "outlook", "expects" or "target" are forward-looking statements. These statements involve risks and uncertainties that include recruiting and activity of the Company's independent sales forces, the success of new product introductions and promotional programs, governmental approvals of materials for use in food containers and beauty and personal care products, changes in the fair value of previously acquired businesses and trade names, the success of buyers in obtaining financing or attracting tenants for commercial and residential developments, the effects of economic and political conditions generally and foreign exchange risk in particular and other risks detailed in the Company's periodic reports as filed in accordance with the Securities Exchange Act of 1934.
The Company updates each month the impact of changes in foreign exchange rates versus the prior year, posting it on; http://ir.tupperwarebrands.com/foreign-exchange-impact.cfm. Other than updating for changes in foreign currency exchange rates, the Company does not intend to update forward-looking information, except through its quarterly earnings releases, unless it expects diluted earnings per share for the current quarter, excluding items impacting comparability and the impact of changes in foreign exchange rates, to be significantly below its previous guidance.
Non-GAAP Financial Measures
The Company has utilized non-GAAP financial measures in this release, which are provided to assist readers' understanding of the Company's results of operations. These amounts, identified as items impacting comparability, at times materially impact the comparability of the Company's results of operations. The adjusted information is intended to be indicative of Tupperware Brands' primary operations, and to assist readers in evaluating performance and analyzing trends across periods.
The non-GAAP financial measures exclude gains from the sale of property, plant and equipment and insurance settlements related to casualty losses, inventory obsolescence in conjunction with decisions to exit or significantly restructure businesses, asset retirement obligations, and re-engineering and impairment charges. Further, while the Company is engaged in a multi-year program to sell land adjacent to its Orlando, Florida headquarters, and also disposes of other excess land and facilities periodically, these activities are not part of the Company's primary business operations. Additionally, amounts recognized in any given period are not indicative of amounts that may be recognized in any particular future period. For this reason, these amounts are excluded as indicated. Further, the Company excludes significant charges related to casualty losses caused by significant weather events, fires or similar circumstances. It also excludes any related gains resulting from the settlement of associated insurance claims. While these types of events can and do recur periodically, they are excluded from indicated financial information due to their distinction from ongoing business operations, inherent volatility and impact on the comparability of earnings across quarters. Also, the Company periodically records exit costs accounted for using the applicable accounting guidance for exit or disposal cost obligations and other amounts related to rationalizing its supply chain operations and other restructuring activities, including upon liquidation of operations in a country the recognition in income of amounts previously recorded in equity as a cumulative translation adjustment, and believes these amounts are similarly volatile and impact the comparability of earnings across quarters. Therefore, they are also excluded from indicated financial information to provide what the Company believes represents a useful measure for analysis and predictive purposes.
The Company believes that excluding from indicated financial information costs incurred in connection with a significant change in its capital structure that is of a nature that would be expected to recur sporadically, also provides a useful measure for analysis and predictive purposes. During the first quarter of 2013, the Venezuelan government abolished the exchange rate that the Company had previously used in translating the results of its Venezuelan operations, and at the same time devalued the official foreign exchange rate in that country. Due to the lack of a connection between the market perceived value of the Venezuelan bolivar and the exchange rate mandated by the Venezuelan government, and now used by the Company, and the sporadic timing of such mandated changes in the exchange rate, the non-GAAP measures exclude for analysis and predictive purposes, the impact from devaluations on the bolivar denominated net monetary asset, inventory and non-recurring deferred tax balance sheet positions of the Company in Venezuela at the time of such devaluations.
The Company has also elected to present financial measures excluding the impact of amortizing the purchase accounting carrying value of certain definite-lived intangible assets, primarily the value of its Fuller trade name recorded in connection with the Company's December 2005 acquisition of the direct selling businesses of Sara Lee Corporation. The amortization expense related to these assets will continue for several years. Similarly, in connection with its evaluation of the carrying value of acquired intangible assets and goodwill, the Company has periodically recognized impairment charges. The Company believes that these types of non-cash charges will not be representative in any single reporting period of amounts recorded in prior reporting periods or expected to be recorded in future reporting periods. Therefore, they are excluded from indicated financial information to also provide a useful measure for analysis and predictive purposes.
As the impact of changes in exchange rates are an important factor in understanding period-to-period comparisons, the Company believes the presentation of results on a local currency basis, in addition to reported results, helps improve readers' ability to understand the Company's operating results and evaluate performance in comparison with prior periods. The Company presents local currency information that compares results between periods as if current period exchange rates had been the exchange rates in the prior period. The Company uses results on a local currency basis as one measure to evaluate performance. The Company generally refers to such amounts as calculated on a local currency basis, as restated or excluding the impact of foreign currency. These results should be considered in addition to, not as a substitute for, results reported in accordance with GAAP. Results on a local currency basis may not be comparable to similarly titled measures used by other companies and are not measures of performance presented in accordance with GAAP.
In information included with this release, the Company has referred to Adjusted EBITDA and a Debt/Adjusted EBITDA ratio, which are non-GAAP financial measures used in the Company's credit agreement. The Company uses these measures in its capital allocation decision process and in discussions with investors, analysts and other interested parties and therefore believes it is useful to disclose this amount and ratio. The Company's calculation of these measures is in accordance with its credit agreement, and is set forth in the reconciliation from GAAP amounts in an attachment to this release; however, the reader is cautioned that other companies define these measures in different ways, and consequently they will likely not be comparable with similarly labeled amounts disclosed by others.
TUPPERWARE BRANDS CORPORATION
FOURTH QUARTER SALES STATISTICS*
(UNAUDITED)
All Units
Reported
Sales
Inc/(Dec)%
Restated+
Sales
Inc/(Dec)%
Active
Sales
Force
Inc/(Dec)
vs. Q4 '12
%
Total
Sales
Force
Inc/(Dec)
vs. Q4 '12
%
Europe
(1)
(2)
99,231
1
679,984
8
g
Asia Pacific
1
12
250,495
5
a
1,021,452
4
TW North America
4
4
94,179
3
b,e
347,423
5
Beauty North America
(14)
(13)
242,003
(13)
c
482,520
(11)
c
South America
17
28
98,398
5
d
363,254
18
d
Total All Units
1
5
784,306
(2)
f
2,894,633
4
Emerging Market Units
Europe
(5)
2
65,155
5
488,405
9
g
Asia Pacific
7
17
218,973
6
a
918,645
5
TW North America
14
14
84,114
2
b
263,748
3
Beauty North America
(11)
(11)
215,464
(12)
c
402,803
(12)
c
South America
17
28
98,398
5
d
363,254
18
d
Total Emerging Market Units
5
12
682,104
(1)
2,436,855
4
Established Market Units
Europe
1
(4)
34,077
(4)
191,579
7
g
Asia Pacific
(17)
(3)
31,521
0
102,807
1
TW North America
(4)
(3)
10,064
5
e
83,675
11
Beauty North America
(21)
(20)
26,540
(21)
c
79,717
(9)
c
South America
0
0
-
0
-
0
Total Established Market Units
(5)
(5)
102,202
(7)
457,778
3
* Sales force statistics as collected by the Company and, in some cases, provided by distributors and sales force. The Company classifies Established Market Units as those operating in Western Europe, including Scandinavia, the United States, Canada, Australia and Japan, and its remaining units as Emerging Market Units. Active Sales Force is defined as the average number of people ordering in each cycle over the course of the quarter, and Total Sales Force is defined as the number of sales force members of the units as of the end of the quarter.
+ Local currency changes are measured by comparing current year results with those of the prior year translated at the current year's foreign exchange rates.
Notes
a Local currency sales increase above active seller increase reflected productivity improvement in Indonesia, as the result of higher prices and standards, and higher sales in China, which operates an outlet model without a traditional sales force. There was also a mix shift toward these units that have higher than average order sizes and away from the Philippines that is beauty and personal care focused with a below average order size.
b Higher B2B sales in Mexico had a 4, 8 and 1/2 point positive impact on the local currency sales comparisons for total Tupperware North America, Tupperware North America emerging markets, and total Company, respectively.
c The sales force size deficit in the Beauty North America segment reflected a lower number and lower recruiting success of Field Managers at Fuller Mexico, and the need to better engage with the sales force leadership levels at BeautiControl, both of which are being addressed. The lower total sales force size led to the lower number of active sellers in these businesses.
d The active seller comparison in South America lagging the local currency sales increase reflected a change in approach in Argentina to focus on a lower number of more profitable sales zones and to shift the product assortment toward housewares at higher price points. Also impacting the comparison were inflation related price increases across the segment, as well as accelerated sales growth in those units with higher average order sizes. The changes in Argentina were also the main source of the difference between the total and active seller increases.
e The increase in the active seller comparison versus the local currency sales in Tupperware North America Established markets decrease reflected year-over-year differences in the promotional program designed to engage a greater number and proportion of those in the total sales force.
f The majority of the difference in the overall Company's increase in sales in local currency versus a decrease in active sellers came from a mix shift away from Fuller Mexico that based on its model has a lower than average order size and a higher than average activity rate. The factors outlined in notes a - e above also contributed to the difference.
g The most significant factors in the better total sales force size versus active sales force size comparison in Europe were: less activity by the CIS sales force in light of disruption in the sales force manager force due to a change in an entrepreneur tax in 2013 that has been rescinded as of the beginning of 2014; a change as of the beginning of 2013 in the measurement of activity in the Nutrimetics France business; and strong recruiting in the fourth quarter generally where not all of the recruits that will become active have yet done so.
TUPPERWARE BRANDS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
13 Weeks Ended
13 Weeks Ended
52 Weeks Ended
52 Weeks Ended
Dec. 28,
Dec. 29,
Dec. 28,
Dec. 29,
(In millions, except per share data)
2013
2012
2013
2012
Net sales
$ 717.1
$ 711.0
$ 2,671.6
$ 2,583.8
Cost of products sold
241.4
237.1
889.8
856.4
Gross margin
475.7
473.9
1,781.8
1,727.4
Delivery, sales and administrative expense
346.5
343.4
1,369.7
1,329.5
Re-engineering and impairment charges
2.2
18.4
9.3
22.4
Impairment of goodwill and intangible assets
-
-
-
76.9
Gains on disposal of assets including insurance recoveries
(0.4)
(0.1)
0.7
7.9
Operating income
126.6
112.0
403.5
306.5
Interest income
0.7
0.6
2.6
2.5
Interest expense
10.7
7.9
40.2
34.9
Other (income) expense
0.5
1.2
5.5
1.3
Income before income taxes
116.1
103.5
360.4
272.8
Provision for income taxes
26.4
29.0
86.2
79.8
Net income
$ 89.7
$ 74.5
$ 274.2
$ 193.0
Net income per common share:
Basic earnings per share:
$ 1.78
$ 1.37
$ 5.28
$ 3.49
Diluted earnings per share:
$ 1.74
$ 1.34
$ 5.17
$ 3.42
TUPPERWARE BRANDS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(Amounts in millions, except per share)
13 Weeks
13 Weeks
52 Weeks
52 Weeks
Ended
Ended
Reported
Restated *
Foreign
Ended
Ended
Reported
Restated *
Foreign
Dec 28,
Dec 29,
%
%
Exchange
Dec 28,
Dec 29,
%
%
Exchange
2013
2012
Inc (Dec)
Inc (Dec)
Impact
2013
2012
Inc (Dec)
Inc (Dec)
Impact
Net Sales:
Europe
$ 218.4
$ 221.2
(1)
(2)
$ 2.0
$ 782.7
$ 791.4
(1)
-
$ (5.8)
Asia Pacific
222.4
219.2
1
12
(20.7)
836.9
780.7
7
14
(48.5)
TW North America
94.9
91.5
4
4
(0.5)
358.0
344.8
4
3
2.9
Beauty North America
78.9
91.3
(14)
(13)
(0.1)
320.1
348.3
(8)
(10)
6.4
South America
102.5
87.8
17
28
(7.5)
373.9
318.6
17
26
(22.9)
$ 717.1
$ 711.0
1
5
$ (26.8)
$ 2,671.6
$ 2,583.8
3
6
$ (67.9)
Segment profit:
Europe
$ 47.8
$ 50.7
(6)
(6)
$ 0.7
$ 130.0
$ 131.6
(1)
-
$ (2.1)
Asia Pacific
54.8
54.0
1
12
(5.0)
188.1
172.7
9
16
(10.6)
TW North America
21.7
18.4
18
18
(0.1)
65.9
63.7
3
2
1.0
Beauty North America
1.1
7.2
(85)
(85)
-
16.1
30.2
(47)
(49)
1.1
South America
19.4
18.8
3
12
(1.5)
68.9
61.0
13
21
(4.1)
144.8
149.1
(3)
1
(5.9)
469.0
459.2
2
5
(14.7)
Unallocated expenses
(16.1)
(19.8)
(19)
(19)
(0.4)
(62.4)
(62.6)
(1)
(2)
(0.7)
Gains on disposal of assets including insurance recoveries
(0.4)
(0.1)
+
+
-
0.7
7.9
(91)
(91)
-
Re-engineering and impairment charges
(2.2)
(18.4)
(88)
(88)
-
(9.3)
(22.4)
(59)
(59)
-
Impairment of goodwill and intangible assets
-
-
-
-
-
-
(76.9)
(100)
(100)
-
Interest expense, net
(10.0)
(7.3)
36
36
-
(37.6)
(32.4)
16
16
-
Income before taxes
116.1
103.5
12
20
(6.3)
360.4
272.8
32
40
(15.4)
Provision for income taxes
26.4
29.0
(9)
(4)
(1.4)
86.2
79.8
8
13
(3.6)
Net income
$ 89.7
$ 74.5
21
29
$ (4.9)
$ 274.2
$ 193.0
42
51
$ (11.8)
Net income per common share (diluted)
$ 1.74
$ 1.34
30
39
(0.09)
$ 5.17
$ 3.42
51
61
(0.21)
Weighted Average number of diluted shares
51.5
55.6
53.1
56.4
* 2013 actual compared with 2012 translated at 2013 exchange rates.
TUPPERWARE BRANDS CORPORATION
NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
(In millions except per share data)
13 Weeks Ended Dec 28, 2013
13 Weeks Ended Dec 29, 2012
Reported
Adj's
Excl Adj's
Reported
Adj's
Excl Adj's
Segment profit
Europe
$ 47.8
$ -
$ 47.8
$ 50.7
$ (0.2)
a
$ 50.5
Asia Pacific
54.8
0.6
a
55.4
54.0
0.2
a
54.2
TW North America
21.7
-
21.7
18.4
-
18.4
Beauty North America
1.1
2.2
a
3.3
7.2
0.2
a
7.4
South America
19.4
0.1
a
19.5
18.8
18.8
144.8
2.9
147.7
149.1
0.2
149.3
Unallocated expenses
(16.1)
(16.1)
(19.8)
(19.8)
Gains on disposal of assets
(0.4)
0.4
c
-
(0.1)
0.1
c
-
Re-eng and impairment chgs
(2.2)
2.2
d
-
(18.4)
18.4
d
-
Interest expense, net
(10.0)
(10.0)
(7.3)
-
(7.3)
Income before taxes
116.1
5.5
121.6
103.5
18.7
122.2
Provision for income taxes
26.4
2.0
e
28.4
29.0
(2.1)
e
26.9
Net income
$ 89.7
$ 3.5
$ 93.2
$ 74.5
$20.8
$ 95.3
Net income per common share (diluted)
$ 1.74
$0.07
$ 1.81
$ 1.34
$0.37
$ 1.71
52 Weeks Ended Dec 28, 2013
52 Weeks Ended Dec 29, 2012
Reported
Adj's
Excl Adj's
Reported
Adj's
Excl Adj's
Segment profit
Europe
$ 130.0
$ 0.2
a
$ 130.2
$ 131.6
$ 0.6
a
$ 132.2
Asia Pacific
188.1
1.2
a
189.3
172.7
0.9
a
173.6
TW North America
65.9
-
65.9
63.7
-
63.7
Beauty North America
16.1
3.2
a
19.3
30.2
0.8
a
31.0
South America
68.9
4.4
a, g
73.3
61.0
61.0
469.0
9.0
478.0
459.2
2.3
461.5
Unallocated expenses
(62.4)
(62.4)
(62.6)
(0.5)
b
(63.1)
Gains on disposal of assets including insurance rec
0.7
(0.7)
c
-
7.9
(7.9)
c
-
Re-eng and impairment chgs
(9.3)
9.3
d
-
(22.4)
22.4
d
-
Impairment of goodwill and intangible assets
-
-
(76.9)
76.9
f
-
Interest expense, net
(37.6)
(37.6)
(32.4)
(32.4)
Income before taxes
360.4
17.6
378.0
272.8
93.2
366.0
Provision for income taxes
86.2
3.5
e
89.7
79.8
4.8
e
84.6
Net income
$ 274.2
$14.1
$ 288.3
$ 193.0
$ 88.4
$ 281.4
Net income per common share (diluted)
$ 5.17
$0.26
$ 5.43
$ 3.42
$ 1.57
$ 4.99
(a)
Amortization of intangibles of acquired beauty units, as well as inventory obsolescence adjustments in connection with exiting small Nutrimetics businesses in Europe in 2012, $(0.3M) in the fourth quarter and $.02M for the full year.
(b)
Change in estimate of asset retirement obligation for the Company's Orlando and South Carolina locations.
(c)
Gain on disposal of assets of $0.7 million in full year 2013 and $7.9 million in full year 2012, was primarily from the sale of land in Orlando and the sale of a facility in Belgium, respectively.
(d)
Re-engineering and impairment charges of $9.3 million in 2013 and $22.4 million in 2012, included severance costs incurred for headcount reductions in several of the Company's operations in connection with changes in its management and organizational structures, and in 2012, the decision to cease operating its Nutrimetics businesses in Greece in the United Kingdom, as well as the relocation of its office in Poland. The majority of the fourth quarter 2012 amount was to write-off the cumulative translation adjustment in the United Kingdom related to the Company's exit from that country.
(e)
Provision for income taxes represented the net tax impact of adjusted amounts.
(f)
After review in 2012, the purchase accounting intangibles of BeautiControl , NaturCare Japan and Nutrimetics were deemed to be impaired, resulting in non-cash charges of $76.9 million.
(g)
Translation impact of $4.2 million in 2013 was related to the net monetary asset, inventory and non-recurring deferred tax balance sheet positions when, in the first quarter of 2013, the Venezuelan government devalued the bolivar to U.S. dollar exchange rate to 6.3.
See note regarding non-GAAP financial measures in the attached press release.
TUPPERWARE BRANDS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Year Ended
Year Ended
December 28,
December 29,
(In millions)
2013
2012
OPERATING ACTIVITIES
Net cash provided by operating activities
$ 323.5
$ 298.7
INVESTING ACTIVITIES
Capital expenditures
(69.0)
(75.6)
Proceeds from disposal of property, plant & equipment
8.9
10.8
Net cash used in investing activities
(60.1)
(64.8)
FINANCING ACTIVITIES
Dividend payments to shareholders
(116.8)
(77.6)
Net proceeds from issuance of senior notes
200.0
-
Repurchase of common stock
(379.4)
(205.0)
Repayment of long-term debt and capital lease obligations
(2.5)
(2.3)
Net change in short-term debt
27.8
6.0
Debt issuance costs
(2.2)
-
Proceeds from exercise of stock options
21.0
12.9
Excess tax benefits from share-based payment arrangements
14.5
13.5
Net cash used in financing activities
(237.6)
(252.5)
Effect of exchange rate changes on cash and
cash equivalents
(18.3)
0.2
Net change in cash and cash equivalents
7.5
(18.4)
Cash and cash equivalents at beginning of year
119.8
138.2
Cash and cash equivalents at end of period
$ 127.3
$ 119.8
TUPPERWARE BRANDS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
Dec. 28,
Dec. 29,
(In millions)
2013
2012
Assets
Cash and cash equivalents
$
127.3
$
119.8
Other current assets
640.3
646.7
Total current assets
767.6
766.5
Property, plant and equipment, net
300.8
298.8
Other assets
762.7
756.5
Total assets
$
1,831.1
$
1,821.8
Liabilities and Shareholders' Equity
Short-term borrowings and current
portion of long-term debt
$
235.2
$
203.4
Accounts payable and other current liabilities
518.3
491.1
Total current liabilities
753.5
694.5
Long-term debt
619.9
414.4
Other liabilities
201.9
233.8
Total shareholders' equity
255.8
479.1
Total liabilities and shareholders' equity
$
1,831.1
$
1,821.8
Debt to Adjusted EBITDA* Ratio as of and for the four quarters ended Dec. 28, 2013: 1.80 times
*Adjusted EBITDA as defined in the Company's credit agreement under
Consolidated EBITDA. See calculation attached to this release.
TUPPERWARE BRANDS CORPORATION
NON-GAAP FINANCIAL MEASURES OUTLOOK RECONCILIATION SCHEDULE
January 29, 2014
(UNAUDITED)
($ in millions, except per share amounts)
First Quarter
First Quarter
2013 Actual
2014 Outlook
Range
Low
High
Income before income taxes
$ 78.2
$ 73.1
$ 76.6
Income tax
20.0
18.2
19.1
Effective Rate
26%
25%
25%
Net Income (GAAP)
$ 58.2
$ 54.9
$ 57.5
% change from prior year
-6%
-1%
Adjustments(1):
Impact of Venezuelan bolivar devaluation on balance sheet positions
$ 3.9
$ -
$ -
Re-engineering and other restructuring costs
2.2
1.0
1.0
Acquired intangible asset amortization
0.3
2.9
2.9
Income tax (2)
(0.2)
(1.0)
(1.0)
Net Income (adjusted)
64.4
57.8
60.4
Exchange rate impact (3)
(7.8)
-
-
Net Income (adjusted and 2013 restated for currency changes)
56.6
57.8
60.4
% change from prior year
2%
7%
Net income (GAAP) per common share (diluted)
$ 1.06
$ 1.08
$ 1.13
% change from prior year
2%
7%
Net Income (adjusted) per common share (diluted)
$ 1.18
$ 1.13
$ 1.18
Net Income (adjusted & restated) per common share (diluted)
$ 1.04
$ 1.13
$ 1.18
% change from prior year
9%
13%
Average number of diluted shares (millions)
54.7
51.0
51.0
(1) Refer to Non-GAAP Financial Measures section of attached release for description of the general nature of adjustment items
(2) Represents income tax impact of adjustments on an item-by-item basis
(3) Difference between 2013 actual and 2013 translated at current currency exchange rates
See the note related to Venezuela foreign exchange on the following page
TUPPERWARE BRANDS CORPORATION
NON-GAAP FINANCIAL MEASURES OUTLOOK RECONCILIATION SCHEDULE
January 29, 2014
(UNAUDITED)
($ in millions, except per share amounts)
Full Year
Full Year
2013 Actual
2014 Outlook
Range
Low
High
Income before income taxes
$ 360.4
$ 351.1
$ 361.1
Income tax
86.2
87.5
90.0
Effective Rate
24%
25%
25%
Net Income (GAAP)
$ 274.2
$ 263.6
$ 271.1
% change from prior year
-4%
-1%
Adjustments(1):
Gains on disposal of assets including insurance recoveries
$ (0.7)
$ -
$ -
Re-engineering and other restructuring costs
9.3
10.0
10.0
Impact of Venezuelan bolivar devaluation on balance sheet positions
4.2
-
-
Acquired intangible asset amortization
4.8
11.6
11.6
Income tax (2)
(3.5)
(5.7)
(5.7)
Net Income (adjusted)
288.3
279.5
287.0
Exchange rate impact (3)
(23.4)
-
-
Net Income (adjusted and 2013 restated for currency changes)
264.9
279.5
287.0
% change from prior year
5%
8%
Net income (GAAP) per common share (diluted)
$ 5.17
$ 5.20
$ 5.35
% change from prior year
1%
3%
Net Income (adjusted) per common share (diluted)
$ 5.43
$ 5.51
$ 5.66
Net Income (adjusted & restated) per common share (diluted)
$ 4.99
$ 5.51
$ 5.66
% change from prior year
10%
13%
Average number of diluted shares (millions)
53.1
50.7
50.7
(1) Refer to Non-GAAP Financial Measures section of attached release for description of the general nature of adjustment items
(2) Represents income tax impact of adjustments on an item-by-item basis
(3) Difference between 2012 actual and 2012 translated at current currency exchange rates
The Company's outlook assumes no change in the current Venezuelan exchange rate of 6.3 bolivars to the U.S. dollar. If the rate had gone to 63 bolivars to the dollar as of the beginning of the first quarter of 2014, the Company estimates its full-year 2014 pre-tax earnings would be $65 million lower than shown above, of which $40 million would relate to amounts already on the balance sheet at the end of December 2013, and the rest to the translation of 2014 activity at the lower rate.
TUPPERWARE BRANDS CORPORATION
ADJUSTED EBITDA AND DEBT/ADJUSTED EBITDA *
(UNAUDITED)
As of and for
the Four Quarters
Ended
Dec 28,
2013
Adjusted EBITDA:
Net income
$
274.2
Add:
Depreciation and amortization
54.8
Gross interest expense
40.2
Provision for income taxes
86.2
Equity compensation
19.1
Deduct:
Gains on land sales, insurance recoveries, etc.
(0.7)
Total Adjusted EBITDA
$
473.8
Consolidated total debt
$
855.1
Divided by adjusted EBITDA
473.8
Debt to Adjusted EBITDA Ratio
1.80
*
Amounts and calculations are based on the definitions and provisions of the Company's $650 million Credit Agreement dated September 11, 2013 and, where applicable, are based on the trailing four quarter amounts. "Adjusted EBITDA" is calculated as defined for "Consolidated EBITDA" in the Credit Agreement.
Yahoo Reports Fourth Quarter and Full Year 2013 Results
Business Wire Yahoo! Inc.
1 hour ago
SUNNYVALE, Calif.--(BUSINESS WIRE)--
Yahoo! Inc. (YHOO) today reported results for the fourth quarter and full year ended December 31, 2013.
Q4 2012 Q4 2013
Percent
Change
GAAP revenue $1,346 million $1,266 million
(6)%
Revenue ex-TAC $1,221 million $1,200 million (2)%
GAAP income from operations $190 million $174 million (8)%
Non-GAAP income from operations $340 million $330 million (3)%
GAAP net earnings per diluted share $0.23 $0.33 40%
Non-GAAP net earnings per diluted share $0.35 $0.46 31%
Full Year 2012
Full Year 2013
Percent
Change
GAAP revenue
$4,987 million
$4,680 million
(6)%
Revenue ex-TAC
$4,468 million
$4,426 million
(1)%
GAAP income from operations
$566 million
$590 million
4%
Non-GAAP income from operations
$1,049 million
$935 million
(11)%
GAAP net earnings per diluted share
$3.28
$1.26
(62)%
Non-GAAP net earnings per diluted share
$1.31
$1.52
16%
"I'm encouraged by Yahoo's performance in Q4 and 2013 overall. We saw continued stability in the business, and our investments allowed us to bring beautiful products to our users and establish a strong foundation for revenue growth," said Yahoo CEO Marissa Mayer. "In Q4, we launched the new Yahoo Mail, Yahoo Finance, and our new Flickr photo books, while quickening our pace of experimentation. We are extremely heartened by the year-over-year traffic increase we experienced in 2013, an early sign of return on our investments and the acquisitions we’ve made."
GAAP revenue was $1,266 million for the fourth quarter of 2013, a 6 percent decrease from the fourth quarter of 2012. Revenue excluding traffic acquisition costs (“revenue ex-TAC”) was $1,200 million for the fourth quarter of 2013, a 2 percent decrease compared to the fourth quarter of 2012. GAAP revenue was $4,680 million for the full year of 2013, a 6 percent decrease compared to the prior year. Revenue ex-TAC was $4,426 million for the full year of 2013, a 1 percent decrease compared to the prior year.
Adjusted EBITDA for the fourth quarter of 2013 was $478 million, a 6 percent decrease compared to the fourth quarter of 2012. Adjusted EBITDA was $1,564 million for the full year of 2013, an 8 percent decrease compared to the prior year.
GAAP income from operations was $174 million for the fourth quarter of 2013 (which includes a $70 million pre-tax gain from the sale of patents to an operating company), an 8 percent decrease from the fourth quarter of 2012. Non-GAAP income from operations was $330 million for the fourth quarter of 2013 compared to $340 million in the fourth quarter of 2012. GAAP income from operations was $590 million for the full year of 2013, a 4 percent increase compared to the prior year. Non-GAAP income from operations was $935 million for the full year of 2013 compared to $1,049 million for the prior year.
GAAP net earnings for the fourth quarter of 2013 was $348 million (which includes a $49 million net gain from the sale of patents), a 28 percent increase compared to $272 million in the fourth quarter of 2012. Non-GAAP net earnings for the fourth quarter of 2013 was $482 million, a 17 percent increase from the same period of 2012. GAAP net earnings for the full year of 2013 was $1,366 million, a 65 percent decrease compared to $3,945 million for the prior year (which included a net gain related to the sale of Alibaba Group shares of $2,755 million). Non-GAAP net earnings for the full year of 2013 was $1,646 million, a 4 percent increase compared to the prior year.
GAAP net earnings per diluted share was $0.33 in the fourth quarter of 2013 (which includes a net gain of $0.05 per diluted share related to the sale of patents), compared to $0.23 in the fourth quarter of 2012. Non-GAAP net earnings per diluted share was $0.46 in the fourth quarter of 2013, compared to $0.35 in the fourth quarter of 2012. GAAP net earnings per diluted share was $1.26 for the full year of 2013, compared to $3.28 for the prior year (which included a net gain of $2.29 per diluted share related to the sale of Alibaba Group shares). Non-GAAP net earnings per diluted share was $1.52 for the full year of 2013, compared to $1.31 for the prior year.
Business Highlights
Yahoo continued to launch new products and improve existing properties in the fourth quarter, addressing the daily habits of users around the world. The Company introduced an improved and expanded Yahoo Finance experience across web, mobile and tablet, as well as a major update to Yahoo Mail. In addition, Yahoo Screen was extended to Apple TV, Flickr rolled out Photo Books, and Yahoo Weather expanded to iPad.
During the fourth quarter, Yahoo acquired Aviate (ThumbsUp Labs), PeerCDN (Instant IO), Evntlive, Ptch, SkyPhrase, LookFlow, Bread Labs and Hitpost to strengthen its products, content offerings, core technology and talent.
The Company continued to strengthen its content offerings by investing in world class talent. During the fourth quarter, Yahoo hired David Pogue to lead consumer tech coverage and Matt Bai as national political columnist, both formerly with the New York Times. In addition, Katie Couric joined the Company as Global Anchor in January 2014.
Fourth Quarter and Full Year 2013 Financial Highlights
Display:
GAAP display revenue was $553 million for the fourth quarter of 2013, a 6 percent decrease compared to $591 million for the fourth quarter of 2012. GAAP display revenue was $1,950 million for the full year of 2013, a 9 percent decrease compared to $2,143 million for the prior year.
Display revenue ex-TAC was $491 million for the fourth quarter of 2013, a 6 percent decrease compared to $520 million for the fourth quarter of 2012. Display revenue ex-TAC was $1,737 million for the full year of 2013, a 9 percent decrease compared to $1,899 million for the prior year.
The Number of Ads Sold (excluding Korea) increased approximately 3 percent compared to the fourth quarter of 2012.
Price-per-Ad (excluding Korea) decreased approximately 7 percent compared to the fourth quarter of 2012.
Search:
GAAP search revenue was $464 million for the fourth quarter of 2013, a 4 percent decrease compared to $482 million for the fourth quarter of 2012. GAAP search revenue was $1,742 million for the full year of 2013, an 8 percent decrease compared to $1,886 million for the prior year.
Search revenue ex-TAC was $461 million for the fourth quarter of 2013, an 8 percent increase compared to $427 million for the fourth quarter of 2012. Search revenue ex-TAC was $1,699 million for the full year of 2013, a 6 percent increase compared to $1,611 million for the prior year.
Paid Clicks (excluding Korea) increased approximately 17 percent compared to the fourth quarter of 2012.
Price-per-Click (excluding Korea) decreased approximately 3 percent compared to the fourth quarter of 2012.
Cash Balance:
Cash, cash equivalents, and investments in marketable securities were $5 billion as of December 31, 2013 compared to $6 billion as of December 31, 2012, a decrease of $1 billion.
During the fourth quarter of 2013, Yahoo repurchased 6 million shares for $231 million and used a net $60 million for acquisitions. During the year ended December 31, 2013, Yahoo repurchased 129 million shares for $3.3 billion and used a net $1.2 billion for acquisitions.
During the fourth quarter of 2013, Yahoo received net proceeds of $1.3 billion, which is net of the call spread, from the issuance of 0.00% Convertible Senior Notes due 2018 and net proceeds of $295 million from the settlement of derivative hedge contracts.
“In 2013, we improved our capital structure by raising $1.3 billion of convertible debt, net of the call spread, at attractive rates and further strengthened our balance sheet by generating $786 million in free cash flow and realizing $304 million through Japanese Yen hedges,” said Ken Goldman, CFO of Yahoo. “We continue to return capital to shareholders as we repurchased 129 million shares at an average cost of $25.95 per share for a total of $3.3 billion during the year and increased our share buyback authorization by $5 billion."
Live Stream
Yahoo will live stream a video broadcast of the Company's fourth quarter and full year 2013 financial results at 2 p.m. Pacific Time/5 p.m. Eastern Time today. The live stream will be broadcast from Yahoo’s Sunnyvale studio and will be available exclusively on Yahoo Finance at finance.yahoo.com. The Company will provide its business outlook for the first quarter during the presentation. Supplemental financial information can be accessed through the Company’s Investor Relations website at investor.yahoo.net. The video will be archived after the event at investor.yahoo.net and will be available for 90 days following the broadcast.
Non-GAAP Financial Measures
This press release and its attachments include the following financial measures defined as non-GAAP financial measures by the Securities and Exchange Commission (“SEC”): revenue ex-TAC; adjusted EBITDA; non-GAAP income from operations; non-GAAP net earnings; non-GAAP net earnings per share - diluted; and free cash flow.
Revenue ex-TAC is GAAP revenue less traffic acquisition costs. Adjusted EBITDA, non-GAAP income from operations, non-GAAP net earnings and non-GAAP net earnings per share - diluted, exclude from the most comparable GAAP financial measures certain gains, losses, and expenses that we do not believe are indicative of ongoing results, and exclude stock-based compensation expense. Adjusted EBITDA also excludes taxes, depreciation, amortization of intangible assets, other income, net (which includes interest), earnings in equity interests, and net income attributable to noncontrolling interests. Free cash flow is GAAP net cash provided by operating activities (adjusted to include excess tax benefits from stock-based awards), less acquisition of property and equipment, net and dividends received from equity investees.
These measures may be different than non-GAAP financial measures used by other companies. The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles (“GAAP”). Explanations of the Company’s non-GAAP financial measures and reconciliations of these financial measures to the GAAP financial measures the Company considers most comparable are included in the accompanying “Note to Unaudited Condensed Consolidated Financial Statements,” “Supplemental Financial Data and GAAP to Non-GAAP Reconciliations,” and “GAAP to Non-GAAP Reconciliations.”
About Yahoo
Yahoo is focused on making the world's daily habits inspiring and entertaining. By creating highly personalized experiences for our users, we keep people connected to what matters most to them, across devices and around the world. In turn, we create value for advertisers by connecting them with the audiences that build their businesses. Yahoo is headquartered in Sunnyvale, California, and has offices located throughout the Americas, Asia Pacific (APAC) and the Europe, Middle East and Africa (EMEA) regions. For more information, visit the pressroom (pressroom.yahoo.net) or the Company's blog (yahoo.tumblr.com).
“Affiliates” refers to the third-party entities that have integrated Yahoo’s advertising offerings into their Websites or other offerings (those Websites and other offerings, “Affiliate sites”).
“Alibaba Group” means Alibaba Group Holding Limited.
“Net earnings” means net income attributable to Yahoo! Inc., and “net earnings per diluted share” means net income attributable to Yahoo! Inc. common stockholders per share – diluted.
“Number of Ads Sold” is defined as the total number of display ad impressions for paying advertisers on Yahoo Properties.
“Paid Clicks” are defined as the total number of times an end-user clicks on a sponsored search listing on Yahoo Properties and Affiliate sites.
“Price-per-Ad” is defined as display revenue from Yahoo Properties divided by our Number of Ads Sold.
“Price-per-Click” is defined as search revenue divided by our Paid Clicks.
We periodically review and refine our methodologies for monitoring, gathering, and counting Number of Ads Sold and Paid Clicks, and for calculating Price-per-Ad and Price-per-Click.
Additional information about how “Number of Ads Sold,” “Paid Clicks,” “Price-per-Ad,” and “Price-per-Click” are defined and calculated is included under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013, which is on file with the SEC and available on the SEC's website at www.sec.gov. Due to the closure of the Korea business in the fourth quarter of 2012, “Number of Ads Sold”, “Paid Clicks”, “Price-per-Ad”, and “Price-per-Click,” as presented above, exclude the Korea market for all periods.
“Search Agreement” refers to the Search and Advertising Services and Sales Agreement between Yahoo and Microsoft Corporation, as amended.
“TAC” refers to traffic acquisition costs. TAC consists of payments to Affiliates and payments made to companies that direct consumer and business traffic to Yahoo Properties.
“Yahoo Properties” refers to the online properties and services that Yahoo provides to users.
This press release contains forward-looking statements concerning Yahoo's expected financial performance and Yahoo's strategic and operational plans (including, without limitation, the quotations from management). Risks and uncertainties may cause actual results to differ materially from the results predicted, and reported results should not be considered as an indication of future performance. The potential risks and uncertainties include, among others, acceptance by users of new products and services (including, without limitation, products and services for mobile devices and alternative platforms); Yahoo's ability to compete with new or existing competitors; reduction in spending by, or loss of, advertising customers; risks associated with the Search Agreement with Microsoft Corporation; risks related to Yahoo’s regulatory environment; Yahoo’s ability to protect its intellectual property and the value of its brands; adverse results in litigation; security breaches; interruptions or delays in the provision of Yahoo’s services; risks related to Yahoo's international operations; risks related to joint ventures and the integration of acquisitions; dependence on third parties for technology, services, content, and distribution; and general economic conditions. All information set forth in this press release and its attachments is as of January 28, 2014. Yahoo does not intend, and undertakes no duty, to update this information to reflect subsequent events or circumstances. More information about potential factors that could affect the Company's business and financial results is included under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Annual Report on Form 10-K for the year ended December 31, 2012, as amended, and Quarterly Report on Form 10-Q for the quarter ended September 30, 2013, which are on file with the SEC and available on the SEC's website at www.sec.gov. Additional information will also be set forth in those sections in Yahoo’s Annual Report on Form 10-K for the year ended December 31, 2013, which will be filed with the SEC in the first quarter of 2014.
Yahoo!, Flickr, Aviate, PeerCDN, Evntlive, Ptch, SkyPhrase, LookFlow, Bread Labs and Hitpost, and the Yahoo logos are trademarks and/or registered trademarks of Yahoo! Inc. All other names are trademarks and/or registered trademarks of their respective owners.
Yahoo! Inc.
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
December 31,
December 31,
2012 2013
ASSETS
Current assets:
Cash and cash equivalents $ 2,667,778 $ 2,077,590
Short-term marketable securities 1,516,175 1,330,304
Accounts receivable, net 1,008,448 979,559
Prepaid expenses and other current assets 460,312 638,404
Total current assets 5,652,713 5,025,857
Long-term marketable securities 1,838,425 1,589,500
Alibaba Group Preference Shares 816,261 -
Property and equipment, net 1,685,845 1,488,518
Goodwill 3,826,749 4,679,648
Intangible assets, net 153,973 417,808
Other long-term assets 289,130 177,281
Investments in equity interests 2,840,157 3,426,347
Total assets $ 17,103,253 $ 16,804,959
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $ 184,831 $ 138,031
Accrued expenses and other current liabilities 808,475 907,782
Deferred revenue 296,926 294,499
Total current liabilities 1,290,232 1,340,312
Convertible debt - 1,110,585
Long-term deferred revenue 407,560 258,904
Capital lease and other long-term liabilities 124,587 116,605
Deferred and other long-term tax liabilities, net 675,271 847,956
Total liabilities 2,497,650 3,674,362
Total Yahoo! Inc. stockholders' equity 14,560,200 13,074,909
Noncontrolling interests 45,403 55,688
Total equity 14,605,603 13,130,597
Total liabilities and equity $ 17,103,253 $ 16,804,959
Yahoo! Inc.
Unaudited Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
Three Months Ended Year Ended
December 31, December 31,
2012 2013 2012 2013
Revenue $ 1,345,807 $ 1,265,795 $ 4,986,566 $ 4,680,380
Operating expenses:
Cost of revenue - Traffic acquisition costs 124,961 65,594 518,906 254,442
Cost of revenue - Other 287,147 273,906 1,101,660 1,094,938
Sales and marketing 274,122 311,501 1,101,572 1,130,820
Product development 240,417 275,265 885,824 1,008,487
General and administrative 144,610 149,791 540,247 569,555
Amortization of intangibles 7,926 14,139 35,819 44,841
Gain on sale of patents - (70,000 ) - (79,950 )
Goodwill impairment charge - 63,555 - 63,555
Restructuring charges, net 76,634 7,826 236,170 3,766
Total operating expenses 1,155,817 1,091,577 4,420,198 4,090,454
Income from operations 189,990 174,218 566,368 589,926
Other income, net 17,730 (2,691 ) 4,647,839 43,357
Income before income taxes and earnings in equity interests 207,720 171,527 5,214,207 633,283
Provision for income taxes (83,007 ) (41,498 ) (1,940,043 ) (153,392 )
Earnings in equity interests 148,939 221,641 676,438 896,675
Net income 273,652 351,670 3,950,602 1,376,566
Less: Net income attributable to noncontrolling interests (1,385 ) (3,480 ) (5,123 ) (10,285 )
Net income attributable to Yahoo! Inc. $ 272,267 $ 348,190 $ 3,945,479 $ 1,366,281
Net income attributable to Yahoo! Inc. common stockholders per share - diluted (1) $ 0.23 $ 0.33 $ 3.28 $ 1.26
Shares used in per share calculation - diluted 1,168,336 1,038,754 1,202,906 1,070,811
Stock-based compensation expense by function:
Cost of revenue - Other $ 2,207 $ 6,330 $ 10,078 $ 15,545
Sales and marketing 22,161 32,857 82,115 101,852
Product development 19,955 25,894 74,284 83,396
General and administrative 13,139 19,672 57,888 77,427
Restructuring expense reversals, net - - (3,429 ) -
Supplemental Financial Data:
Revenue ex-TAC $ 1,220,846 $ 1,200,201 $ 4,467,660 $ 4,425,938
Adjusted EBITDA $ 508,912 $ 478,333 $ 1,698,727 $ 1,564,245
Free cash flow(2)(3) $ (2,044,502 ) $ 256,120 $ (834,865 ) $ 786,465
(1) The impact of outstanding stock awards of entities in which the Company holds equity interests that are accounted for using the equity method reduced the Company's diluted earnings per share by $0.01 for the three months ended December 31, 2013 and $0.02 for the year ended December 31, 2013.
(2) The year ended December 31, 2012 includes a payment of $550 million from Alibaba Group related to a technology and intellectual property license agreement.
(3) The three months and year ended December 31, 2012 include a cash tax payment of $2.3 billion which is related to the sale of Alibaba Group shares.
Yahoo! Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
Three Months Ended Year Ended
December 31, December 31,
2012 2013 2012 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 273,652 $ 351,670 $ 3,950,602 $ 1,376,566
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 148,213 119,839 549,235 532,485
Amortization of intangible assets 21,279 28,153 105,366 96,518
Accretion of convertible debt discount - 4,846 - 4,846
Stock-based compensation expense, net 57,462 84,753 220,936 278,220
Non-cash goodwill impairment charge - 63,555 - 63,555
Non-cash restructuring charges 69,434 - 109,896 547
Dividend income related to Alibaba Group Preference Shares (20,000 ) - (20,000 ) (35,726 )
Tax (detriments) benefits from stock-based awards (21,969 ) 15,167 (31,440 ) 49,061
Excess tax benefits from stock-based awards (5,093 ) (17,214 ) (35,844 ) (64,407 )
Deferred income taxes 121,968 (9,321 ) (769,320 ) (84,302 )
Earnings in equity interests (148,939 ) (221,641 ) (676,438 ) (896,675 )
Dividends received from equity investees - - 83,648 135,058
Gain related to sale of Alibaba Group shares - - (4,603,322 ) -
Gain from the sale of patents - (70,000 ) - (79,950 )
Gain from sale of investments, assets, and other, net 6,468 2,403 (11,840 ) 22,397
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable, net (52,190 ) (135,260 ) 34,752 26,199
Prepaid expenses and other 37,470 35,189 78,529 27,401
Accounts payable 35,204 46,579 12,747 (7,764 )
Accrued expenses and other liabilities (2,373,163 ) 84,853 255,799 (98,853 )
Deferred revenue (49,671 ) (35,844 ) 465,140 (149,929 )
Net cash (used in) provided by operating activities (2)(3) (1,899,875 ) 347,727 (281,554 ) 1,195,247
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment, net (149,720 ) (108,821 ) (505,507 ) (338,131 )
Purchases of marketable securities (1,681,467 ) (975,888 ) (3,520,327 ) (3,223,190 )
Proceeds from sales of marketable securities 56,968 229,286 741,947 2,871,834
Proceeds from maturities of marketable securities 130,750 191,350 381,403 748,915
Proceeds related to sale of Alibaba shares, net - - 6,247,728 -
Proceeds related to the redemption of Alibaba Group Preference Shares - - - 800,000
Purchases of intangible assets (711 ) (210 ) (3,799 ) (2,500 )
Proceeds from the sale of investments - 181 26,132 181
Proceeds from the settlement of derivative hedge contracts 17,898 306,207 17,898 312,266
Payments for the settlement of derivative hedge contracts (11,141 ) (11,051 ) (11,141 ) (22,708 )
Proceeds from the sale of patents - 70,000 - 79,950
Acquisitions, net of cash acquired (5,716 ) (60,315 ) (5,716 ) (1,247,544 )
Other investing activities, net 2,847 13,103 (6,574 ) (2,294 )
Net cash (used in) provided by investing activities (1,640,292 ) (346,158 ) 3,362,044 (23,221 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock, net 101,951 149,850 218,371 353,267
Repurchases of common stock (1,451,462 ) (231,278 ) (2,167,841 ) (3,344,396 )
Proceeds from issuance of convertible debt, net - 1,412,344 - 1,412,344
Payments for convertible note hedges - (205,706 ) - (205,706 )
Proceeds from the issuance of warrants - 124,775 - 124,775
Excess tax benefits from stock-based awards 5,093 17,214 35,844 64,407
Tax withholdings related to net share settlements of restricted stock awards and restricted stock units
(12,842 ) (33,638 ) (60,939 ) (139,815 )
Proceeds from credit facility - - - 150,000
Repayment of credit facility - 150 - (150,000 )
Other financing activities, net (1,373 ) (3,047 ) (4,892 ) (8,760 )
Net cash (used in) provided by financing activities (1,358,633 ) 1,230,664 (1,979,457 ) (1,743,884 )
Effect of exchange rate changes on cash and cash equivalents 6,178 2,929 4,355 (18,330 )
Net change in cash and cash equivalents (4,892,622 ) 1,235,162 1,105,388 (590,188 )
Cash and cash equivalents, beginning of period 7,560,400 842,428 1,562,390 2,667,778
Cash and cash equivalents, end of period $ 2,667,778 $ 2,077,590 $ 2,667,778 $ 2,077,590
(2) The year ended December 31, 2012 includes a payment of $550 million from Alibaba Group related to a technology and intellectual property license agreement.
(3) The three months and year ended December 31, 2012 include a cash tax payment of $2.3 billion which is related to the sale of Alibaba Group shares.
Yahoo! Inc.
Note to Unaudited Condensed Consolidated Financial Statements
This press release and its attachments include the non-GAAP financial measures of revenue excluding traffic acquisition costs (“revenue ex-TAC”); adjusted EBITDA; non-GAAP income from operations; non-GAAP net earnings; non-GAAP net earnings per diluted share; and free cash flow, which are reconciled to revenue; net income attributable to Yahoo! Inc. (in the case of adjusted EBITDA and non-GAAP net earnings); income from operations; net income attributable to Yahoo! Inc. common stockholders per share – diluted; and net cash provided by operating activities, which we believe are the most comparable GAAP measures. We use these non-GAAP financial measures for internal managerial purposes and to facilitate period-to-period comparisons. We describe limitations specific to each non-GAAP financial measure below. Management generally compensates for limitations in the use of non-GAAP financial measures by relying on comparable GAAP financial measures and providing investors with a reconciliation of the non-GAAP financial measure to the most directly comparable GAAP financial measure or measures. Further, management uses non-GAAP financial measures only in addition to and in conjunction with results presented in accordance with GAAP. We believe that these non-GAAP financial measures reflect an additional way of viewing aspects of our operations that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business. These non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, revenue, net income attributable to Yahoo! Inc., income from operations, net income attributable to Yahoo! Inc. common stockholders per share – diluted, and net cash provided by operating activities calculated in accordance with GAAP.
Revenue ex-TAC is a non-GAAP financial measure defined as GAAP revenue less TAC. TAC consists of payments made to third-party entities that have integrated our advertising offerings into their Websites or other offerings (those Websites and other offerings, “Affiliate sites”) and payments made to companies that direct consumer and business traffic to Yahoo’s online properties and services (“Yahoo Properties”). Based on the terms of the Search Agreement with Microsoft, Microsoft retains a revenue share of 12 percent of the net (after TAC) search revenue generated on Yahoo Properties and Affiliate sites in transitioned markets. Yahoo reports the net revenue it receives under the Search Agreement as revenue and no longer presents the associated TAC. Accordingly, for transitioned markets Yahoo reports GAAP revenue associated with the Search Agreement on a net (after TAC) basis rather than a gross basis. For markets that have not yet transitioned, revenue continues to be recorded on a gross basis, and TAC is recorded as a part of operating expenses. We present revenue ex-TAC to provide investors a metric used by the Company for evaluation and decision-making purposes during the Microsoft transition and to provide investors with comparable revenue numbers when comparing periods preceding, during and following the transition period. A limitation of revenue ex-TAC is that it is a measure which we have defined for internal and investor purposes that may be unique to the Company, and therefore it may not enhance the comparability of our results to other companies in our industry who have similar business arrangements but address the impact of TAC differently. Management compensates for these limitations by also relying on the comparable GAAP financial measures of revenue and total operating expenses, which includes TAC in non-transitioned markets.
Adjusted EBITDA is defined as net income attributable to Yahoo! Inc. before taxes, depreciation, amortization of intangible assets, stock-based compensation expense, other income, net (which includes interest), earnings in equity interests, net income attributable to noncontrolling interests and other gains, losses, and expenses that we do not believe are indicative of our ongoing results. Yahoo presents adjusted EBITDA because the exclusion of certain gains, losses, and expenses facilitates comparisons of the operating performance of our Company on a period to period basis. Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation or as a substitute for results reported under GAAP. These limitations include: adjusted EBITDA does not reflect tax payments and such payments reflect a reduction in cash available to us; adjusted EBITDA does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in our businesses; adjusted EBITDA does not include stock-based compensation expense related to the Company’s workforce; adjusted EBITDA also excludes other income, net (which includes interest), earnings in equity interests, net income attributable to noncontrolling interests and other gains, losses, and expenses that we do not believe are indicative of our ongoing results, and these items may represent a reduction or increase in cash available to us; and adjusted EBITDA is a measure that may be unique to the Company, and therefore it may not enhance the comparability of our results to other companies in our industry. Management compensates for these limitations by also relying on the comparable GAAP financial measure of net income attributable to Yahoo! Inc., which includes taxes, depreciation, amortization, stock-based compensation expense, other income, net (which includes interest), earnings in equity interests, net income attributable to noncontrolling interests and the other gains, losses and expenses that are excluded from adjusted EBITDA.
Non-GAAP income from operations is defined as income from operations excluding certain gains, losses, and expenses that we do not believe are indicative of our ongoing operating results and further adjusted to exclude stock-based compensation expense. Because of the variety of equity awards used by companies, the varying methodologies for determining stock-based compensation expense, and the subjective assumptions involved in those determinations, we believe excluding stock-based compensation expense enhances the ability of management and investors to understand the impact of stock-based compensation expense on income from operations. We consider non-GAAP income from operations to be a profitability measure which facilitates the forecasting of our operating results for future periods and allows for the comparison of our results to historical periods. A limitation of non-GAAP income from operations is that it does not include all items that impact our income from operations for the period. Management compensates for this limitation by also relying on the comparable GAAP financial measure of income from operations which includes the gains, losses, and expenses that are excluded from non-GAAP income from operations.
Non-GAAP net earnings is defined as net income attributable to Yahoo! Inc. excluding certain gains, losses, expenses, and their related tax effects that we do not believe are indicative of our ongoing results and further adjusted to exclude stock-based compensation expense and its related tax effects. Because of the variety of equity awards used by companies, the varying methodologies for determining stock-based compensation expense, and the subjective assumptions involved in those determinations, we believe excluding stock-based compensation expense enhances the ability of management and investors to understand the impact of stock-based compensation expense on net income and net income per share. We consider non-GAAP net earnings and non-GAAP net earnings per diluted share to be profitability measures which facilitate the forecasting of our results for future periods and allow for the comparison of our results to historical periods. A limitation of non-GAAP net earnings and non-GAAP net earnings per diluted share is that they do not include all items that impact our net income and net income per diluted share for the period. Management compensates for this limitation by also relying on the comparable GAAP financial measures of net income attributable to Yahoo! Inc. and net income attributable to Yahoo! Inc. common stockholders per share - diluted, both of which include the gains, losses, expenses and related tax effects that are excluded from non-GAAP net earnings and non-GAAP net earnings per diluted share.
Free cash flow is a non-GAAP financial measure defined as net cash provided by operating activities (adjusted to include excess tax benefits from stock-based awards), less acquisition of property and equipment, net and dividends received from equity investees. We consider free cash flow to be a liquidity measure which provides useful information to management and investors about the amount of cash generated by the business after the acquisition of property and equipment, which can then be used for strategic opportunities including, among others, investing in the Company's business, making strategic acquisitions, strengthening the balance sheet, and repurchasing stock. A limitation of free cash flow is that it does not represent the total increase or decrease in the cash balance for the period. Management compensates for this limitation by also relying on the net change in cash and cash equivalents as presented in the Company’s unaudited condensed consolidated statements of cash flows prepared in accordance with GAAP which incorporates all cash movements during the period.
Yahoo! Inc.
Supplemental Financial Data and GAAP to Non-GAAP Reconciliations
(in thousands)
Three Months Ended Year Ended
December 31, December 31,
2012 2013 2012 2013
Revenue for groups of similar services:
Display $ 590,627 $ 553,085 $ 2,142,818 $ 1,949,830
Search 481,957 463,710 1,885,860 1,741,791
Other 273,223 249,000 957,888 988,759
Total revenue $ 1,345,807 $ 1,265,795 $ 4,986,566 $ 4,680,380
Revenue excluding traffic acquisition costs ("revenue ex-TAC") for groups of similar services:
GAAP display revenue $ 590,627 $ 553,085 $ 2,142,818 $ 1,949,830
TAC associated with display revenue (70,218 ) (62,388 ) (243,557 ) (212,662 )
Display revenue ex-TAC $ 520,409 $ 490,697 $ 1,899,261 $ 1,737,168
GAAP search revenue $ 481,957 $ 463,710 $ 1,885,860 $ 1,741,791
TAC associated with search revenue for non-transitioned markets (54,743 ) (2,345 ) (275,349 ) (42,433 )
Search revenue ex-TAC $ 427,214 $ 461,365 $ 1,610,511 $ 1,699,358
Other GAAP revenue $ 273,223 $ 249,000 $ 957,888 $ 988,759
TAC associated with other GAAP revenue - (861 ) - 653
Other revenue ex-TAC $ 273,223 $ 248,139 $ 957,888 $ 989,412
Revenue ex-TAC:
GAAP revenue $ 1,345,807 $ 1,265,795 $ 4,986,566 $ 4,680,380
TAC (124,961 ) (65,594 ) (518,906 ) (254,442 )
Revenue ex-TAC $ 1,220,846 $ 1,200,201 $ 4,467,660 $ 4,425,938
Revenue ex-TAC by segment:
Americas:
GAAP revenue $ 960,118 $ 959,835 $ 3,461,633 $ 3,481,502
TAC (52,357 ) (47,897 ) (182,511 ) (158,974 )
Revenue ex-TAC $ 907,761 $ 911,938 $ 3,279,122 $ 3,322,528
EMEA:
GAAP revenue $ 113,527 $ 103,819 $ 472,061 $ 385,186
TAC (16,982 ) (10,078 ) (114,230 ) (42,915 )
Revenue ex-TAC $ 96,545 $ 93,741 $ 357,831 $ 342,271
Asia Pacific:
GAAP revenue $ 272,162 $ 202,141 $ 1,052,872 $ 813,692
TAC (55,622 ) (7,619 ) (222,165 ) (52,553 )
Revenue ex-TAC $ 216,540 $ 194,522 $ 830,707 $ 761,139
Total revenue ex-TAC $ 1,220,846 $ 1,200,201 $ 4,467,660 $ 4,425,938
Direct costs by segment (4):
Americas $ 183,236 $ 187,884 $ 733,316 $ 701,561
EMEA 41,325 45,646 161,990 165,412
Asia Pacific 60,046 45,921 224,114 198,185
Global operating costs (5) 443,384 442,417 1,672,070 1,796,535
Restructuring charges, net 76,634 7,826 236,170 3,766
Depreciation and amortization 168,769 147,981 649,267 628,778
Goodwill impairment charge - 63,555 - 63,555
Stock-based compensation expense 57,462 84,753 224,365 278,220
Income from operations $ 189,990 $ 174,218 $ 566,368 $ 589,926
Reconciliation of net income attributable to Yahoo! Inc. to adjusted EBITDA:
Net income attributable to Yahoo! Inc. $ 272,267 $ 348,190 $ 3,945,479 $ 1,366,281
Costs associated with the Korea business and its closure (6) 99,485 - 99,485 -
Deal-related costs related to the sale of Alibaba shares - - 6,500 -
Depreciation and amortization 168,769 147,981 649,267 628,778
Goodwill impairment charge - 63,555 - 63,555
Stock-based compensation expense 57,462 84,753 224,365 278,220
Restructuring charges, net (6) (6,794 ) 7,826 152,742 3,766
Other income, net (17,730 ) 2,691 (4,647,839 ) (43,357 )
Provision for income taxes 83,007 41,498 1,940,043 153,392
Earnings in equity interests (148,939 ) (221,641 ) (676,438 ) (896,675 )
Net income attributable to noncontrolling interests 1,385 3,480 5,123 10,285
Adjusted EBITDA $ 508,912 $ 478,333 $ 1,698,727 $ 1,564,245
Reconciliation of net cash provided by (used in) operating activities to free cash flow:
Net cash provided by (used in) operating activities $ (1,899,875 ) $ 347,727 $ (281,554 ) $ 1,195,247
Acquisition of property and equipment, net (149,720 ) (108,821 ) (505,507 ) (338,131 )
Dividends received from equity investees - - (83,648 ) (135,058 )
Excess tax benefits from stock-based awards 5,093 17,214 35,844 64,407
Free cash flow (2)(3) $ (2,044,502 ) $ 256,120 $ (834,865 ) $ 786,465
(2) The year ended December 31, 2012 includes a payment of $550 million from Alibaba Group related to a technology and intellectual property license agreement.
(3) The three months and year ended December 31, 2012 include a cash tax payment of $2.3 billion which is related to the sale of Alibaba Group shares.
(4) Direct costs for each segment include cost of revenue (excluding TAC) and other operating expenses that are directly attributable to the segment such as employee compensation expense (excluding stock-based compensation expense), local sales and marketing expenses, and facilities expenses.
(5) Global operating costs include product development, service engineering and operations, general and administrative, and other corporate expenses that are managed on a global basis and that are not directly attributable to any particular segment.
(6) For the three months and year ended December 31, 2012, costs associated with the Korea business and its closure include $83 million of restructuring charges.
Yahoo! Inc.
GAAP to Non-GAAP Reconciliations
(in thousands, except per share amounts)
Three Months Ended
December 31,
2012 2013
GAAP Income from operations $ 189,990 $ 174,218
(a) Costs associated with the Korea business and its closure 99,485 -
(b) Restructuring charges, net (7) (6,794 ) 7,826
(c) Stock-based compensation 57,462 84,753
(d) Goodwill impairment charge - 63,555
Non-GAAP Income from operations (8) $ 340,143 $ 330,352
GAAP Net income attributable to Yahoo! Inc. $ 272,267 $ 348,190
(a) Costs associated with the Korea business and its closure 99,485 -
(b) Restructuring charges, net (7) (6,794 ) 7,826
(c) Stock-based compensation 57,462 84,753
(d) Goodwill impairment charge - 63,555
(e)
To adjust the provision for income taxes to exclude the tax impact of items (a) through (d) above for the three months ended
December 31, 2012 and 2013
(9,100 ) (22,389 )
Non-GAAP net earnings (9) $ 413,320 $ 481,935
GAAP net income attributable to Yahoo! Inc. common stockholders per share - diluted (1) $ 0.23 $ 0.33
Non-GAAP net earnings per share - diluted (9) $ 0.35 $ 0.46
Shares used in per share calculation - diluted 1,168,336 1,038,754
Year Ended
December 31,
2012 2013
GAAP income from operations $ 566,368 $ 589,926
(a) Costs associated with the Korea business and its closure 99,485 -
(b) Restructuring charges, net (7) 152,742 3,766
(c) Stock-based compensation 224,365 278,220
(d) Deal-related costs related to the sale of Alibaba shares 6,500 -
(e) Goodwill impairment charge - 63,555
Non-GAAP income from operations (8) $ 1,049,460 $ 935,467
GAAP net income attributable to Yahoo! Inc. $ 3,945,479 $ 1,366,281
(a) Costs associated with the Korea business and its closure 99,485 -
(b) Restructuring charges, net (7) 152,742 3,766
(c) Stock-based compensation 224,365 278,220
(d) Deal-related costs related to the sale of Alibaba shares 6,500 -
(e) Gain related to sale of Alibaba shares (4,603,322 ) -
(f) Goodwill impairment charge - 63,555
(g)
To adjust the provision for income taxes to exclude the tax impact of items (a) through (f) above for the year ended
December 31, 2012 and 2013
1,754,336 (65,384 )
Non-GAAP net earnings (9) $ 1,579,585 $ 1,646,438
GAAP net income attributable to Yahoo! Inc. common stockholders per share - diluted (1) $ 3.28 $ 1.26
Non-GAAP net earnings per share - diluted (9)(10) $ 1.31 $ 1.52
Shares used in per share calculation - diluted 1,202,906 1,070,811
(1) The impact of outstanding stock awards of entities in which the Company holds equity interests that are accounted for using the equity method reduced the Company's diluted earnings per share by $0.01 for the three months ended December 31, 2013 and $0.02 for the year ended December 31, 2013.
(7) For the three months and year ended December 31, 2012, this amount excludes the restructuring charges related to the Korea business and its closure of $83 million, which is included in item (a) above.
(8) Commencing in 2013, non-GAAP income from operations excludes stock-based compensation expense. Prior period amounts have been revised to conform to the current presentation.
(9) Commencing in 2013, non-GAAP net earnings and non-GAAP net earnings per share - diluted exclude stock-based compensation expense and its related tax effects. Prior period amounts have been revised to conform to the current presentation.
(10) The impact of outstanding stock awards of entities in which the Company holds equity interests that are accounted for using the equity method reduced the Company's non-GAAP diluted earnings per share by $0.02 for the year ended December 31, 2013.
Contact:
Yahoo! Inc.
Media Relations Contact:
Sarah Meron, 408-349-4040
media@yahoo-inc.com
or
Investor Relations Contact:
Joon Huh, 408-349-3382
investorrelations@yahoo-inc.com
Acorn TV's Record-Breaking Year With Exclusive North American Premieres of Hit British Mysteries and Dramas
GlobeNewswire RLJ Entertainment, Inc.
January 22, 2014 11:00 AM
'Best British TV' Streaming Service Triples Subscribers and Grows 475% in Weekly Views
On Track for Groundbreaking 2014 With Even More Exclusive Premieres and Availability on Additional Platforms
SILVER SPRING, Md., Jan. 22, 2014 (GLOBE NEWSWIRE) -- With the growing excitement surrounding British television and its reputation for brilliant casts, sumptuous costumes and well-written storylines, Acorn TV, the first streaming service focused on the best of British TV in North America, achieves a record-breaking year. Acorn TV, RLJ Entertainment's (RLJE) first proprietary digital channel, tripled its subscribers, reached nearly four million website visits to www.Acorn.TV, and, in just the last six months, has grown 475% in weekly views. The North American premiere of smash hit UK series Doc Martin, Series 6, among others exclusives, and its growing marketing outreach for its popular Roku and online channels were instrumental in Acorn TV's success in 2013. 2014 is looking to be another record year with more exclusive premieres, including episodes from the final series of Agatha Christie's Poirot; and increased availability on additional devices.
In fall 2013, the exclusive premiere of Doc Martin, Series 6 set a new record for Acorn TV with more than a quarter of a million views during its initial eight-week debut. Doc Martin is one of the biggest success stories on public television in recent years, and, in the U.K., it's among ITV's highest-rated dramas with more than 10 million viewers. Additionally in 2013, Acorn TV introduced North American viewers to a diverse assortment of exclusive premieres, including Australian noir Jack Irish starring Guy Pearce; archaeological reality series Time Team, UK hit series Vera starring two-time Oscar nominee Brenda Blethyn; new episodes of its longtime, bestselling series Midsomer Murders; as well as streaming the newest episodes of universally acclaimed detective series Foyle's War, to which RLJ Entertainment owns all rights to.
Acorn TV began 2014 with the exclusive debut of hit Australian period mystery series Miss Fisher's Murder Mysteries, Series 2. Coming in February, Acorn TV features another Jack Irish TV movie, more feature-length episodes from 1960s set mystery series George Gently, and new sitcom You, Me & Them starring Anthony Head and Lindsay Duncan. Beginning in summer 2014, the "Best British TV" streaming service features the final episodes of Agatha Christie's Poirot, which will conclude David Suchet's iconic portrayal of Poirot in all 70 adaptations.
Miguel Penella, Chief Executive Officer of RLJ Entertainment, Inc., said, "RLJ Entertainment has worked aggressively the last 2 years to create and program a subscription service that can fill the void for the millions of Americans craving high quality British content. With tripling our subscriber base and reaching record-setting views, 2013 was a breakthrough year for Acorn TV. With even more exclusive content and platforms, 2014 will be another groundbreaking year for Acorn TV."
Available at www.Acorn.TV and via its Roku channel, Acorn TV streams more than 80 mysteries, period dramas, documentaries and comedies, with more than half streaming exclusively on Acorn TV. Acorn TV adds at least six series each month and offers consumers a 30-day free trial.
Acorn TV is accessible on the #1 streaming player, Roku, as well as computers, and through the browsers on iPhones and iPads. It is also available on many other portable devices. In the coming months, Acorn TV will be available on many more platforms, including an iOS app, and Samsung Smart TV and Blu-ray players.
Called the "chief curators of the best Brit TV" by TIME magazine, RLJ Entertainment's Acorn brand holds exclusive North American distribution rights to many of the most critically acclaimed British programs, which are available for streaming on Acorn TV and from Acorn in lavishly packaged DVDs/Blu-rays. RLJ Entertainment also manages the literary estate of Agatha Christie, the best-selling novelist of all time.
Full access to Acorn TV is available to press upon request.
To watch Acorn TV via computers, iPhones, iPads, etc.: www.Acorn.TV
To add the Acorn TV channel on your Roku: https://owner.roku.com/add/acorntv
About Acorn TV
Launched in July 2011 and available at www.Acorn.TV, Acorn TV is the first British TV focused streaming service in North America. Acorn TV offers a free 30-day trial and thereafter is just $4.99/month or $49.99/year. Acorn TV subscribers also receive free shipping on all orders from Acorn's catalog and website, AcornOnline.com.
RLJ Entertainment, Inc. (RLJE) is a premier independent licensee and distributor of entertainment content and programming in North America, the United Kingdom and Australia with over 5,300 exclusive titles. RLJE is a leader in numerous genres via its owned and distributed brands such as Acorn (British TV), Image (feature films, stand-up comedy), One Village (urban), Acacia (fitness), Slingshot (faith), Athena (documentaries), Criterion (art films) and Madacy (gift sets). These titles are distributed in multiple formats including DVD, Blu-Ray, digital download, digital streaming, broadcast television (including satellite and cable), theatrical and non-theatrical.
Via its relationship with Agatha Christie Limited, a company that RLJE owns 64% of, RLJE manages the intellectual property and publishing rights to some of the greatest works of mystery fiction, including stories of the iconic sleuths Miss Marple and Poirot. And through its direct-to-consumer business, RLJE has direct contacts and billing relationships with millions of consumers.
RLJE leverages its management experience to acquire, distribute, and monetize existing and original content for its many distribution channels, including its nascent branded digital subscription channels, and engages distinct audiences with programming that appeals directly to their unique viewing interests. RLJE has proprietary e-commerce web sites for the Acorn and Acacia brands, and owns the recently launched Acorn TV digital subscription service.
Contact:
Press Contact:
RLJ Entertainment, Chad Campbell,
301.608.2115 *138, ccampbell@rljentertainment.com
KKR to invest in Sedgwick
PR Newswire Sedgwick Claims Management Services, Inc.
12 hours ago
MEMPHIS, Tenn., Jan. 27, 2014 /PRNewswire/ -- Sedgwick Claims Management Services, Inc., a leading provider of technology-enabled claims and productivity management solutions, announced today that KKR, together with management, have signed an agreement to acquire majority ownership of Sedgwick for approximately $2.4 billion from its current group of investors, which includes Hellman & Friedman LLC and Stone Point Capital LLC.
(Logo: http://photos.prnewswire.com/prnh/20120813/CL56657LOGO)
(Logo: http://photos.prnewswire.com/prnh/20140127/CL52861LOGO-b)
"We couldn't ask for a better partner in the next stage of Sedgwick's evolution," said David A. North, president and CEO of Sedgwick. "KKR has an exceptional record of investing in financial services companies and will be a valuable strategic resource for our organization. We share a commitment to continued innovation in the claims and productivity management industry. My colleagues and I look forward to collaborating with KKR as we develop solutions for the changing needs of our clients."
"This is a critical time for employers as they adjust to an evolving health care delivery model, the shifting demographics of the workforce and a multitude of additional challenges," said Tagar Olson, Member of KKR and head of its financial services investment practice. "Sedgwick has an exceptional management team, a strong track record of innovation and the technology-driven solutions to address these challenges. We believe our partnership will enable them to maintain and enhance their leadership position in the industry."
On an annual basis, Sedgwick handles more than 2.1 million claims and has fiduciary responsibility for claim payments totaling more than $11 billion.
The transaction is expected to close during the first quarter of 2014, subject to customary conditions and regulatory approvals.
Equity for the investment was provided principally by KKR's North American XI private equity fund. UBS Securities LLC, Deutsche Bank Securities, Morgan Stanley, Mizuho, KKR Capital Markets LLC and MCS Capital Markets LLC provided financing for the transaction. Simpson Thacher & Bartlett LLP and Latham & Watkins LLP provided legal counsel to Sedgwick and KKR, respectively.
About Sedgwick
Sedgwick Claims Management Services, Inc. is the leading North American provider of technology-enabled claims and productivity management solutions. Sedgwick and its affiliated companies deliver cost-effective claims, productivity, managed care, risk consulting and other services to clients through the expertise of more than 11,000 colleagues in some 200 offices located in the U.S. and Canada. The company specializes in workers' compensation; disability, FMLA, and other employee absence; managed care; general, automobile, and professional liability; warranty and credit card claims services; fraud and investigation; structured settlements; and Medicare compliance solutions. Sedgwick and its affiliates design and implement customized programs based on proven practices and advanced technology that exceed client expectations. For more, see www.sedgwick.com.
About KKR
Founded in 1976 and led by Henry Kravis and George Roberts, KKR is a leading global investment firm with $90.2 billion in assets under management as of September 30, 2013. With offices around the world, KKR manages assets through a variety of investment funds and accounts covering multiple asset classes. KKR seeks to create value by bringing operational expertise to its portfolio companies and through active oversight and monitoring of its investments. KKR complements its investment expertise and strengthens interactions with investors through its client relationships and capital markets platform. KKR is publicly traded on the New York Stock Exchange (KKR) and "KKR," as used in this release, includes its subsidiaries, their managed investment funds and accounts, and/or their affiliated investment vehicles, as appropriate. For additional information, please visit KKR's website at www.kkr.com.
About Hellman & Friedman
Hellman & Friedman LLC is a leading private equity investment firm with offices in San Francisco, New York and London. Since its founding in 1984, H&F has raised and, through its affiliated funds, managed over $25 billion of committed capital. The Firm focuses on investing in superior business franchises and serving as a value-added partner to management in select industries including financial services, insurance, software, business & marketing services, internet & digital media, media, healthcare and energy & industrials. For more information on H&F, visit www.hf.com.
About Stone Point Capital
Stone Point Capital is a global private equity firm based in Greenwich, Conn. Stone Point serves as the manager of the Trident Funds, which have raised more than $10 billion in committed capital to make investments in the insurance, employee benefits and financial services industries. Stone Point has a 25-year record of making successful investments in the financial services industry, including in the insurance services sector. For further information about Stone Point, see www.stonepoint.com.
Apple Reports First Quarter Results
iPhone and iPad Sales Drive Record Revenue and Operating Profit
Business Wire Apple Inc.
1 hour ago
CUPERTINO, Calif.--(BUSINESS WIRE)--
Apple® today announced financial results for its fiscal 2014 first quarter ended December 28, 2013. The Company posted record quarterly revenue of $57.6 billion and quarterly net profit of $13.1 billion, or $14.50 per diluted share. These results compare to revenue of $54.5 billion and net profit of $13.1 billion, or $13.81 per diluted share, in the year-ago quarter. Gross margin was 37.9 percent compared to 38.6 percent in the year-ago quarter. International sales accounted for 63 percent of the quarter’s revenue.
The Company sold 51 million iPhones, an all-time quarterly record, compared to 47.8 million in the year-ago quarter. Apple also sold 26 million iPads during the quarter, also an all-time quarterly record, compared to 22.9 million in the year-ago quarter. The Company sold 4.8 million Macs, compared to 4.1 million in the year-ago quarter.
Apple’s Board of Directors has declared a cash dividend of $3.05 per share of the Company’s common stock. The dividend is payable on February 13, 2014, to shareholders of record as of the close of business on February 10, 2014.
“We are really happy with our record iPhone and iPad sales, the strong performance of our Mac products and the continued growth of iTunes, Software and Services,” said Tim Cook, Apple’s CEO. “We love having the most satisfied, loyal and engaged customers, and are continuing to invest heavily in our future to make their experiences with our products and services even better.”
“We generated $22.7 billion in cash flow from operations and returned an additional $7.7 billion in cash to shareholders through dividends and share repurchases during the December quarter, bringing cumulative payments under our capital return program to over $43 billion,” said Peter Oppenheimer, Apple’s CFO.
Apple is providing the following guidance for its fiscal 2014 second quarter:
• revenue between $42 billion and $44 billion
• gross margin between 37 percent and 38 percent
• operating expenses between $4.3 billion and $4.4 billion
• other income/(expense) of $200 million
• tax rate of 26.2 percent
Apple will provide live streaming of its Q1 2014 financial results conference call beginning at 2:00 p.m. PST on January 27, 2014 at www.apple.com/quicktime/qtv/earningsq114. This webcast will also be available for replay for approximately two weeks thereafter.
This press release contains forward-looking statements including without limitation those about the Company’s estimated revenue, gross margin, operating expenses, other income/(expense), and tax rate. These statements involve risks and uncertainties, and actual results may differ. Risks and uncertainties include without limitation the effect of competitive and economic factors, and the Company’s reaction to those factors, on consumer and business buying decisions with respect to the Company’s products; continued competitive pressures in the marketplace; the ability of the Company to deliver to the marketplace and stimulate customer demand for new programs, products, and technological innovations on a timely basis; the effect that product introductions and transitions, changes in product pricing or mix, and/or increases in component costs could have on the Company’s gross margin; the inventory risk associated with the Company’s need to order or commit to order product components in advance of customer orders; the continued availability on acceptable terms, or at all, of certain components and services essential to the Company’s business currently obtained by the Company from sole or limited sources; the effect that the Company’s dependency on manufacturing and logistics services provided by third parties may have on the quality, quantity or cost of products manufactured or services rendered; risks associated with the Company’s international operations; the Company’s reliance on third-party intellectual property and digital content; the potential impact of a finding that the Company has infringed on the intellectual property rights of others; the Company’s dependency on the performance of distributors, carriers and other resellers of the Company’s products; the effect that product and service quality problems could have on the Company’s sales and operating profits; the continued service and availability of key executives and employees; war, terrorism, public health issues, natural disasters, and other circumstances that could disrupt supply, delivery, or demand of products; and unfavorable results of other legal proceedings. More information on potential factors that could affect the Company’s financial results is included from time to time in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s public reports filed with the SEC, including the Company’s Form 10-K for the fiscal year ended September 28, 2013 and its Form 10-Q for the quarter ended December 28, 2013 to be filed with the SEC. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.
Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App Store, and is defining the future of mobile media and computing devices with iPad.
NOTE TO EDITORS: For additional information visit Apple’s PR website (www.apple.com/pr), or call Apple’s Media Helpline at (408) 974-2042.
© 2014 Apple Inc. All rights reserved. Apple, the Apple logo, Mac, Mac OS and Macintosh are trademarks of Apple. Other company and product names may be trademarks of their respective owners.
Apple Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except number of shares which are reflected in thousands and per share amounts)
Three Months Ended
December 28,
2013
December 29,
2012
Net sales $ 57,594 $ 54,512
Cost of sales (1) 35,748 33,452
Gross margin 21,846 21,060
Operating expenses:
Research and development (1) 1,330 1,010
Selling, general and administrative (1) 3,053 2,840
Total operating expenses 4,383 3,850
Operating income 17,463 17,210
Other income/(expense), net 246 462
Income before provision for income taxes 17,709 17,672
Provision for income taxes 4,637 4,594
Net income $ 13,072 $ 13,078
Earnings per share:
Basic $ 14.59 $ 13.93
Diluted $ 14.50 $ 13.81
Shares used in computing earnings per share:
Basic 896,072 938,916
Diluted 901,452 947,217
Cash dividends declared per common share $ 3.05 $ 2.65
(1) Includes share-based compensation expense as follows:
Cost of sales $ 109 $ 85
Research and development $ 289 $ 224
Selling, general and administrative $ 283 $ 236
Apple Inc.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except number of shares which are reflected in thousands)
December 28,
2013
September 28,
2013
ASSETS:
Current assets:
Cash and cash equivalents $ 14,077 $ 14,259
Short-term marketable securities 26,634 26,287
Accounts receivable, less allowances of $94 and $99, respectively 14,200 13,102
Inventories 2,122 1,764
Deferred tax assets 3,742 3,453
Vendor non-trade receivables 10,998 7,539
Other current assets 8,574 6,882
Total current assets 80,347 73,286
Long-term marketable securities 118,131 106,215
Property, plant and equipment, net 15,488 16,597
Goodwill 2,022 1,577
Acquired intangible assets, net 4,105 4,179
Other assets 5,091 5,146
Total assets $ 225,184 $ 207,000
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current liabilities:
Accounts payable $ 29,588 $ 22,367
Accrued expenses 15,824 13,856
Deferred revenue 8,357 7,435
Total current liabilities 53,769 43,658
Deferred revenue – non-current 3,071 2,625
Long-term debt 16,961 16,960
Other non-current liabilities 21,699 20,208
Total liabilities 95,500 83,451
Commitments and contingencies
Shareholders' equity:
Common stock, no par value; 1,800,000 shares authorized; 892,447 and 899,213 shares issued and outstanding, respectively 20,559 19,764
Retained earnings 109,431 104,256
Accumulated other comprehensive income/(loss) (306) (471)
Total shareholders' equity 129,684 123,549
Total liabilities and shareholders' equity $ 225,184 $ 207,000
Apple Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
Three Months Ended
December 28, 2013 December 29, 2012
Cash and cash equivalents, beginning of the period $ 14,259 $ 10,746
Operating activities:
Net income 13,072 13,078
Adjustments to reconcile net income to cash generated by operating activities:
Depreciation and amortization 2,144 1,588
Share-based compensation expense 681 545
Deferred income tax expense 1,253 1,179
Changes in operating assets and liabilities:
Accounts receivable, net (1,098) (668)
Inventories (358) (664)
Vendor non-trade receivables (3,459) (2,174)
Other current and non-current assets (319) 413
Accounts payable 8,191 6,145
Deferred revenue 1,368 1,611
Other current and non-current liabilities 1,195 2,373
Cash generated by operating activities 22,670 23,426
Investing activities:
Purchases of marketable securities (48,397) (37,192)
Proceeds from maturities of marketable securities 5,556 3,460
Proceeds from sales of marketable securities 30,302 23,002
Payments made in connection with business acquisitions, net (525) (284)
Payments for acquisition of property, plant and equipment (1,985) (2,317)
Payments for acquisition of intangible assets (59) (138)
Other 5 (52)
Cash used in investing activities (15,103) (13,521)
Financing activities:
Proceeds from issuance of common stock 134 76
Excess tax benefits from equity awards 280 404
Taxes paid related to net share settlement of equity awards (365) (534)
Dividends and dividend equivalents paid (2,769) (2,493)
Repurchase of common stock (5,029) (1,950)
Cash used in financing activities (7,749) (4,497)
Increase/(decrease) in cash and cash equivalents (182) 5,408
Cash and cash equivalents, end of the period $ 14,077 $ 16,154
Supplemental cash flow disclosure:
Cash paid for income taxes, net $ 3,387 $ 1,890
Cash paid for interest $ 161 $ 0
Apple Inc.
Q1 2014 Unaudited Summary Data
(Units in thousands, Revenue in millions)
Q1'14 Q4'13 Q1'13
Sequential
Change
Year/Year Change
Operating Segments Revenue Revenue Revenue Revenue Revenue
Americas $20,098 $13,941 $20,341 44% - 1%
Europe 13,073 8,005 12,464 63% 5%
Greater China (a) 8,844 5,733 6,830 54% 29%
Japan 4,948 3,341 4,443 48% 11%
Rest of Asia Pacific 3,633 1,980 3,993 83% - 9%
Retail 6,998 4,472 6,441 56% 9%
Total Apple $57,594 $37,472 $54,512 54% 6%
Q1'14 Q4'13 Q1'13
Sequential
Change
Year/Year Change
Product Summary Units Revenue Units Revenue Units Revenue Units Revenue Units Revenue
iPhone (b) 51,025 $32,498 33,797 $19,510 47,789 $30,660 51% 67% 7% 6%
iPad (b) 26,035 11,468 14,079 6,186 22,860 10,674 85% 85% 14% 7%
Mac (b) 4,837 6,395 4,574 5,624 4,061 5,519 6% 14% 19% 16%
iPod (b) 6,049 973 3,498 573 12,679 2,143 73% 70% - 52% - 55%
iTunes/Software/Services (c) 4,397 4,260 3,687 3% 19%
Accessories (d) 1,863 1,319 1,829 41% 2%
Total Apple $57,594 $37,472 $54,512 54% 6%
(a)
Greater China includes China, Hong Kong and Taiwan.
(b)
Includes deferrals and amortization of related non-software services and software upgrade rights.
(c)
Includes revenue from sales on the iTunes Store, the App Store, the Mac App Store, and the iBooks Store, and revenue from sales of AppleCare, licensing and other services.
(d)
Includes sales of hardware peripherals and Apple-branded and third-party accessories for iPhone, iPad, Mac and iPod.
Contact:
Apple
Press:
Steve Dowling, 408-974-1896
dowling@apple.com
or
Investor Relations:
Nancy Paxton, 408-974-5420
paxton1@apple.com
Joan Hoover, 408-974-4570
hoover1@apple.com
P&G Delivers Second Quarter Organic Sales up 3%, Core EPS of $1.21; Confirms Sales and Earnings Outlook for Fiscal Year
Business Wire The Procter & Gamble Company
14 hours ago
CINCINNATI--(BUSINESS WIRE)--
The Procter & Gamble Company (PG) reported second quarter fiscal year 2014 net sales of $22.3 billion, unchanged versus the prior year period, including a negative three percentage point impact from foreign exchange. Organic sales grew three percent. Diluted net earnings per share were $1.18, a decrease of 15 percent versus a base period that included a $0.21 per share holding gain resulting from P&G’s purchase of the balance of its Baby Care and Feminine Care joint venture in Iberia. Core earnings per share were $1.21, a decrease of one percent versus the prior year. On a currency-neutral basis, core earnings per share increased eight percent for the quarter.
“P&G’s second quarter results came in as we expected,” said Chairman, President, and Chief Executive Officer A.G. Lafley. “We’re on-track to deliver our objectives of 3-4% organic sales growth and 5-7% core EPS growth for the fiscal year. We expect strong earnings growth in the second half of the fiscal year driven by solid top-line growth, moderating headwinds from foreign exchange, and productivity savings that build throughout the year.”
October – December Quarter Discussion
Net sales were unchanged versus the prior year at $22.3 billion in the October – December quarter, including a negative three percentage point impact from foreign exchange. Organic sales grew three percent. Organic sales were at or ahead of prior year levels in each reporting segment. Volume grew three percent. Pricing increased sales by one percent, and unfavorable geographic and product mix decreased sales by one percent.
Foreign Net Organic Organic
Volume
Exchange
Price
Mix
Sales
Volume
Sales
Beauty 1% -2% 0% -1% -2% 1% 0%
Grooming 2% -3% 3% -2% 0% 2% 3%
Health Care 6% -1% 2% -3% 4% 6% 5%
Fabric Care and Home Care 5% -3% 0% -1% 1% 5% 4%
Baby, Feminine and Family Care 3% -2% 0% 0% 1% 3% 3%
Total P&G 3% -3% 1% -1% 0% 3% 3%
Beauty segment organic sales were unchanged. Gains from market growth and innovation in Prestige, Hair Care, Deodorants, and Personal Cleansing, were offset by geographic and product mix and a decrease in Skin Care sales.
Grooming segment organic sales increased three percent as higher pricing and innovation on Blades & Razors and Appliances were partially offset by market contraction in developed regions and geographic and product mix.
Health Care segment organic sales grew five percent due to increases in Oral Care and Personal Health Care from innovation which were partially offset by a decrease in Pet Care behind the continuing impacts from the product recalls in the previous fiscal year for Natura.
Fabric Care and Home Care segment organic sales increased four percent with growth in Fabric Care and Home Care due to innovation and market expansion in developing regions. Personal Power sales decreased due to shipments in the prior year which included the impact of Superstorm Sandy.
Baby, Feminine and Family Care segment organic sales increased three percent behind product innovation and Baby Care market growth in the developing regions.
Core earnings per share, which exclude non-core restructuring charges, were $1.21, a decrease of one percent versus the prior year. Foreign exchange reduced earnings by $0.11 per share. Core earnings per share were up eight percent on a currency-neutral basis. Second quarter earnings per share growth was also impacted by a gain of $0.07 per share, or six percent, in the base period from the divestiture of the Italy bleach business. Diluted net earnings per share were $1.18, a decrease of 15 percent versus the prior year.
Core operating profit margin decreased 10 basis points driven by a lower gross margin, partially offset by a reduction in core selling, general and administrative (SG&A) expense as a percentage of net sales. Gross margin decreased 90 basis points due to 130 basis points of geographic and product mix, 90 basis points from foreign exchange, and higher commodity costs, which were partially offset by manufacturing savings of 130 basis points, volume leverage and pricing. Core SG&A as a percentage of sales decreased 80 basis points driven by 100 basis points from marketing and overhead productivity savings. These benefits were partially offset by significant foreign exchange impacts and targeted capability investments. Reported operating profit margin increased 10 basis points, including lower year-on-year restructuring investments.
Operating cash flow was $3.3 billion for the second quarter. The Company repurchased $1.5 billion of common stock and returned $1.7 billion of cash to shareholders as dividends.
Fiscal Year 2014 Guidance
P&G reiterated fiscal year 2014 guidance. The Company continues to expect organic sales growth of three percent to four percent. All-in sales growth is estimated in the range of one percent to two percent, including a negative foreign exchange impact of approximately two percent. Core earnings per share are expected to grow five percent to seven percent for the fiscal year, and reported earnings per share are expected to grow in the range of seven percent to nine percent.
The Company expects strong earnings growth in the second half of its fiscal year driven by solid top-line growth, moderating headwinds from foreign exchange, and productivity savings that build throughout the fiscal year.
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
(Amounts in Millions Except Per Share Amounts)
Selected Financial Information
GAAP CORE (NON-GAAP)*
Three Months Ended December 31 Three Months Ended December 31
2013
2012
% Change
2013
2012
% Change
COST OF PRODUCTS SOLD $11,130 $10,880 2% $11,077 $10,826 2%
GROSS PROFIT 11,150 11,295 -1% 11,203 11,349 -1%
SELLING, GENERAL & ADMINISTRATIVE EXPENSE 6,598 6,803 -3% 6,552 6,702 -2%
OPERATING INCOME 4,552 4,492 1% 4,651 4,647 0%
DILUTED NET EPS FROM CONTINUING OPERATIONS $1.18 $1.39 -15% $1.21 $1.22 -1%
EFFECTIVE TAX RATE 21.6 % 21.9 % N/A 21.5 % 24.4 % N/A
Basis Pt Basis Pt
COMPARISONS AS A % OF NET SALES
Chg Chg
GROSS MARGIN 50.0 % 50.9 % (90) 50.3 % 51.2 % (90)
SELLING, GENERAL & ADMINISTRATIVE EXPENSE 29.6 % 30.6 % (100) 29.4 % 30.2 % (80)
OPERATING MARGIN 20.4 % 20.3 % 10 20.9 % 21.0 % (10)
CASH FLOW (THREE MONTHS ENDED DECEMBER 31) - SOURCE/(USE)
OPERATING CASH FLOW 3,299
FREE CASH FLOW 2,361
DIVIDENDS (1,701)
SHARE REPURCHASE (1,502)
*Core excludes incremental restructuring charges, European legal matters and gain on buyout of Iberian joint venture.
Forward-Looking Statements
Certain statements in this release or presentation, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believe,” “project,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectation and assumptions that are subject to risks and uncertainties which may cause results to differ materially from the forward-looking statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events or otherwise.
Risks and uncertainties to which our forward-looking statements are subject include: (1) the ability to achieve business plans, including growing existing sales and volume profitably and maintaining and improving margins and market share, despite high levels of competitive activity, an increasingly volatile economic environment, lower than expected market growth rates, especially with respect to the product categories and geographical markets (including developing markets) in which the Company has chosen to focus, and/or increasing competition from mid- and lower tier value products in both developed and developing markets; (2) the ability to successfully manage ongoing acquisition, divestiture and joint venture activities to achieve the cost and growth synergies in accordance with the stated goals of these transactions without impacting the delivery of base business objectives; (3) the ability to successfully manage ongoing organizational changes and achieve productivity improvements designed to support our growth strategies, while successfully identifying, developing and retaining particularly key employees, especially in key growth markets where the availability of skilled or experienced employees may be limited; (4) the ability to manage and maintain key customer relationships; (5) the ability to maintain key manufacturing and supply sources (including sole supplier and plant manufacturing sources); (6) the ability to successfully manage regulatory, tax and legal requirements and matters (including, but not limited to, product liability, patent, intellectual property, price controls, import restrictions, environmental and tax policy) and to resolve pending matters within current estimates; (7) the ability to resolve the pending competition law inquiries in Europe within current estimates; (8) the ability to successfully implement, achieve and sustain cost improvement plans and efficiencies in manufacturing and overhead areas, including the Company's outsourcing projects; (9) the ability to successfully manage volatility in foreign exchange rates, as well as our debt and currency exposure (especially in certain countries with currency exchange, import authorization or pricing controls, such as Venezuela, Argentina, China, India and Egypt); (10) the ability to maintain our current credit rating and to manage fluctuations in interest rate, increases in pension and healthcare expense, and any significant credit or liquidity issues; (11) the ability to manage continued global political and/or economic uncertainty and disruptions, especially in the Company's significant geographical markets, due to a wide variety of factors, including but not limited to, terrorist and other hostile activities, natural disasters and/or disruptions to credit markets, resulting from a global, regional or national credit crisis; (12) the ability to successfully manage competitive factors, including prices, promotional incentives and trade terms for products; (13) the ability to obtain patents and respond to technological advances attained by competitors and patents granted to competitors; (14) the ability to successfully manage increases in the prices of commodities, raw materials and energy, including the ability to offset these increases through pricing actions; (15) the ability to develop effective sales, advertising and marketing programs; (16) the ability to stay on the leading edge of innovation, maintain the positive reputation of our brands and ensure trademark protection; and (17) the ability to rely on and maintain key information technology systems and networks (including Company and third-party systems and networks), the security over such systems and networks, and the data contained therein. For additional information concerning factors that could cause actual results to materially differ from those projected herein, please refer to our most recent 10-K, 10-Q and 8-K reports.
About Procter & Gamble
P&G serves approximately 4.8 billion people around the world with its brands. The Company has one of the strongest portfolios of trusted, quality, leadership brands, including Ace®, Always®, Ambi Pur®, Ariel®, Bounty®, Charmin®, Crest®, Dawn®, Downy®, Duracell®, Fairy®, Febreze®, Fusion®, Gain®, Gillette®, Head & Shoulders®, Iams®, Lenor®, Mach3®, Olay®, Oral-B®, Pampers®, Pantene®, Prestobarba®, SK-II®, Tide®, Vicks®, Wella® and Whisper®. The P&G community includes operations in approximately 70 countries worldwide. Please visit http://www.pg.com for the latest news and in-depth information about P&G and its brands.
The Procter & Gamble Company
Exhibit 1: Non-GAAP Measures
In accordance with the SEC’s Regulation G, the following provides definitions of the non-GAAP measures used in the earnings release and the reconciliation to the most closely related GAAP measure.
Organic Sales Growth: Organic sales growth is a non-GAAP measure of sales growth excluding the impacts of acquisitions, divestitures and foreign exchange from year-over-year comparisons. We believe this provides investors with a more complete understanding of underlying sales trends by providing sales growth on a consistent basis. Organic sales is also one of the measures used to evaluate senior management and is a factor in determining their at-risk compensation.
The reconciliation of reported sales growth to organic sales is as follows:
October – December (OND) 2013
Net Foreign Acquisition/ Organic
Sales Exchange Divestiture Sales
Growth Impact Impact* Growth
Beauty -2% 2% 0% 0%
Grooming 0% 3% 0% 3%
Health Care 4% 1% 0% 5%
Fabric Care and Home Care 1% 3% 0% 4%
Baby, Feminine and Family Care 1% 2% 0% 3%
Total P&G 0% 3% 0% 3%
Net Foreign Acquisition/ Organic
Sales Exchange Divestiture Sales
Total P&G
Growth Impact Impact* Growth
FY 2014 (Estimate)
1% to 2%
2%
0% 3% to 4%
*Acquisition/Divestiture Impact includes volume and mix impacts of acquired and divested businesses, as well as rounding impacts necessary to reconcile net sales to organic sales.
Core EPS: This is a measure of the Company’s diluted net earnings per share excluding charges in both years for incremental restructuring due to increased focus on productivity and cost savings and the prior year gain on the buyout of the Iberian joint venture. We do not view these items to be part of our sustainable results. We believe the Core EPS measure provides an important perspective of underlying business trends and results and provides a more comparable measure of year-on-year earnings per share growth. Core EPS is also one of the measures used to evaluate senior management and is a factor in determining their at-risk compensation. The table below provides a reconciliation of diluted net earnings per share to Core EPS:
OND 13 OND 12
Diluted Net Earnings Per Share $1.18 $1.39
Gain on buyout of Iberian JV - ($0.21)
Incremental restructuring $0.03 $0.05
Rounding impacts - ($0.01)
Core EPS $1.21 $1.22
Core EPS Growth -1%
Note – All reconciling items are presented net of tax. Tax effects are calculated consistent with the nature of the underlying transaction.
Currency-neutral Core EPS: This is a measure of the Company’s Core EPS excluding the impact of foreign exchange. We believe the currency-neutral Core EPS measure provides a more comparable view of year-on-year earnings per share growth.
OND 13
Diluted Net Earnings Per Share Decline -15%
Gain on buyout of Iberian joint venture of $0.21 15%
Incremental restructuring of ($0.02) -1%
Core EPS Growth -1%
Foreign exchange impact of $0.11 9%
Currency-neutral Core EPS Growth 8%
Note – All reconciling items are presented net of tax. Tax effects are calculated consistent with the nature of the underlying transaction.
Core Operating Profit Margin: This is a measure of the Company’s Operating Margin adjusted for the current and prior year charges related to incremental restructuring due to increased focus on productivity and cost savings:
OND 13 OND 12
Operating Profit Margin 20.4% 20.3%
Incremental restructuring 0.4% 0.7%
Rounding impacts 0.1% -
Core Operating Profit Margin 20.9% 21.0%
Basis point change -10
Core Selling, General and Administration Expense (SG&A) as a percentage of sales: This is a measure of the Company’s SG&A as a percentage of sales adjusted for the current and prior year charges related to incremental restructuring due to increased focus on productivity and cost savings:
OND 13 OND 12
SG&A as a percentage of sales 29.6% 30.6%
Incremental restructuring (0.2%) (0.5%)
Rounding impacts - 0.1%
Core SG&A as a percentage of sales 29.4% 30.2%
Basis point change -80
Core Effective Tax Rate: This is a measure of the Company’s effective tax rate adjusted for current and prior year charges for incremental restructuring and the prior year holding gain on the buyout of our Iberian joint venture partner. The table below provides a reconciliation of the effective tax rate to the Core effective tax rate:
OND 13 OND 12
Effective Tax Rate 21.6% 21.9%
Tax impact of incremental restructuring (0.1%) (0.3%)
Tax impact of gain on buyout of Iberian JV - 2.8%
Core Effective Tax Rate 21.5% 24.4%
Free Cash Flow: Free cash flow is defined as operating cash flow less capital spending. We view free cash flow as an important measure because it is one factor in determining the amount of cash available for dividends and discretionary investment. The reconciliation of free cash flow is provided below (amounts in millions):
Operating Free Cash
Cash Flow Capital Spending Flow
OND 2013 $3,299 ($938) $2,361
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
(Amounts in Millions Except Per Share Amounts)
Consolidated Earnings Information
Three Months Ended December 31 Six Months Ended December 31
2013 2012 % CHG 2013 2012 % CHG
NET SALES $ 22,280 $ 22,175 0 % $ 43,485 $ 42,914 1 %
COST OF PRODUCTS SOLD 11,130 10,880 2 % 21,940 21,230 3 %
GROSS PROFIT 11,150 11,295 (1)% 21,545 21,684 (1)%
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE 6,598 6,803 (3)% 12,842 13,241 (3)%
OPERATING INCOME 4,552 4,492 1 % 8,703 8,443 3 %
INTEREST EXPENSE 187 169 11 % 352 341 3 %
INTEREST INCOME 23 19 21 % 44 38 16 %
OTHER NON-OPERATING INCOME, NET 43 876 (95)% 48 904 (95)%
EARNINGS BEFORE INCOME TAXES 4,431 5,218 (15)% 8,443 9,044 (7)%
INCOME TAXES 959 1,142 (16)% 1,914 2,115 (10)%
NET EARNINGS 3,472 4,076 (15)% 6,529 6,929 (6)%
LESS: NET EARNINGS ATTRIBUTABLE TO NONCONTROLLING INTERESTS 44 19 132 % 74 58 28 %
NET EARNINGS ATTRIBUTABLE TO PROCTER & GAMBLE $ 3,428 $ 4,057 (16)% $ 6,455 $ 6,871 (6)%
EFFECTIVE TAX RATE 21.6 % 21.9 % 22.7 % 23.4 %
NET EARNINGS PER COMMON SHARE:
BASIC NET EARNINGS PER COMMON SHARE $ 1.24 $ 1.46 (15)% $ 2.32 $ 2.46 (6)%
DILUTED NET EARNINGS PER COMMON SHARE $ 1.18 $ 1.39 (15)% $ 2.21 $ 2.35 (6)%
DIVIDENDS PER COMMON SHARE $ 0.602 $ 0.562 7 % $ 1.203 $ 1.124 7 %
DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 2,908.5 2,919.1 2,916.4 2,926.1
Basis Pt Basis Pt
COMPARISONS AS A % OF NET SALES
Chg Chg
GROSS MARGIN 50.0 % 50.9 % (90) 49.5 % 50.5 % (100)
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE 29.6 % 30.6 % (100) 29.5 % 30.8 % (130)
OPERATING MARGIN 20.4 % 20.3 % 10 20.0 % 19.7 % 30
EARNINGS BEFORE INCOME TAXES 19.9 % 23.5 % (360) 19.4 % 21.1 % (170)
NET EARNINGS 15.6 % 18.4 % (280) 15.0 % 16.1 % (110)
NET EARNINGS ATTRIBUTABLE TO PROCTER & GAMBLE 15.4 % 18.3 % (290) 14.8 % 16.0 % (120)
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
(Amounts in Millions)
Consolidated Earnings Information
Three Months Ended December 31, 2013
% Change % Change % Change
Versus Earnings Before Versus
Versus
Net Sales Year Ago Income Taxes Year Ago
Net Earnings
Year Ago
Beauty $ 5,284 -2% $ 1,160 2% $ 927 6%
Grooming 2,118 0% 730 5% 553 7%
Health Care 2,574 4% 536 7% 377 8%
Fabric Care and Home Care 6,851 1% 1,344 0% 877 0%
Baby, Feminine and Family Care 5,603 1% 1,142 -6% 765 -4%
Corporate (150) N/A (481) N/A (27) N/A
Total Company 22,280 0% 4,431 -15% 3,472 -15%
Net Sales Change Drivers 2013 vs. 2012 (Three Months Ended December 31)
(Percent Change vs. Year Ago)*
Volume
Volume with excluding
Acquisitions & Acquisitions & Net Sales
Divestitures Divestitures Foreign Exchange Price Mix Other Growth
Beauty 1% 1% -2% 0% -1% 0% -2%
Grooming 2% 2% -3% 3% -2% 0% 0%
Health Care 6% 6% -1% 2% -3% 0% 4%
Fabric Care and Home Care 5% 5% -3% 0% -1% 0% 1%
Baby, Feminine and Family Care 3% 3% -2% 0% 0% 0% 1%
Total Company 3% 3% -3% 1% -1% 0% 0%
Six Months Ended December 31, 2013
% Change % Change % Change
Versus Earnings Before Versus
Versus
Net Sales Year Ago Income Taxes Year Ago
Net Earnings
Year Ago
Beauty $ 10,187 -2% $ 2,069 4% $ 1,617 5%
Grooming 4,074 -1% 1,331 0% 1,006 2%
Health Care 4,880 2% 934 -5% 644 -4%
Fabric Care and Home Care 13,551 2% 2,642 -1% 1,734 -1%
Baby, Feminine and Family Care 11,106 3% 2,263 -3% 1,490 -2%
Corporate (313) N/A (796) N/A 38 N/A
Total Company 43,485 1% 8,443 -7% 6,529 -6%
Net Sales Change Drivers 2013 vs. 2012 (Six Months Ended December 31)
(Percent Change vs. Year Ago)*
Volume
Volume with excluding
Acquisitions & Acquisitions & Net Sales
Divestitures Divestitures Foreign Exchange Price Mix Other Growth
Beauty 1% 2% -2% 0% -1% 0% -2%
Grooming 1% 1% -2% 2% -1% -1% -1%
Health Care 2% 2% -1% 2% -1% 0% 2%
Fabric Care and Home Care 6% 6% -3% -1% 0% 0% 2%
Baby, Feminine and Family Care 5% 5% -2% 0% 0% 0% 3%
Total Company 4% 4% -2% 0% -1% 0% 1%
* Sales percentage changes are approximations based on quantitative formulas that are consistently applied.
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
(Amounts in Millions)
Consolidated Statements of Cash Flows
Six Months Ended December 31
2013
2012
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD $5,947 $4,436
OPERATING ACTIVITIES
NET EARNINGS 6,529 6,929
DEPRECIATION AND AMORTIZATION 1,526 1,448
SHARE BASED COMPENSATION EXPENSE 153 154
DEFERRED INCOME TAXES (126) 18
GAIN ON PURCHASE/SALE OF BUSINESSES (5) (902)
CHANGES IN:
ACCOUNTS RECEIVABLE (376) (914)
INVENTORIES (446) (324)
ACCOUNTS PAYABLE, ACCRUED AND OTHER LIABILITIES (1,191) (288)
OTHER OPERATING ASSETS & LIABILITIES (859) 556
OTHER 138 (58)
TOTAL OPERATING ACTIVITIES 5,343 6,619
INVESTING ACTIVITIES
CAPITAL EXPENDITURES (1,663) (1,529)
PROCEEDS FROM ASSET SALES 15 474
ACQUISITIONS, NET OF CASH ACQUIRED 1 (1,123)
CHANGE IN OTHER INVESTMENTS (149) (179)
TOTAL INVESTING ACTIVITIES (1,796) (2,357)
FINANCING ACTIVITIES
DIVIDENDS TO SHAREHOLDERS (3,409) (3,206)
CHANGE IN SHORT-TERM DEBT (429) 4,972
ADDITIONS TO LONG-TERM DEBT 4,271 2,239
REDUCTION OF LONG-TERM DEBT (3) (3,749)
TREASURY STOCK PURCHASES (4,004) (3,984)
IMPACT OF STOCK OPTIONS AND OTHER 937 1,662
TOTAL FINANCING ACTIVITIES (2,637) (2,066)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS 72 11
CHANGE IN CASH AND CASH EQUIVALENTS 982 2,207
CASH AND CASH EQUIVALENTS, END OF PERIOD $6,929 $6,643
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
(Amounts in Millions)
Condensed Consolidated Balance Sheet
December 31, 2013 June 30, 2013
CASH AND CASH EQUIVALENTS $6,929 $5,947
AVAILABLE-FOR-SALE INVESTMENT SECURITIES 1,574 -
ACCOUNTS RECEIVABLE 6,911 6,508
TOTAL INVENTORIES 7,379 6,909
OTHER 4,674 4,626
TOTAL CURRENT ASSETS 27,467 23,990
PROPERTY, PLANT AND EQUIPMENT, NET 22,152 21,666
GOODWILL, TRADEMARKS AND OTHER INTANGIBLE ASSETS, NET 87,888 86,760
OTHER NONCURRENT ASSETS 5,420 6,847
TOTAL ASSETS $142,927 $139,263
ACCOUNTS PAYABLE $7,156 $8,777
ACCRUED AND OTHER LIABILITIES 9,480 8,828
DEBT DUE WITHIN ONE YEAR 14,091 12,432
TOTAL CURRENT LIABILITIES 30,727 30,037
LONG-TERM DEBT 21,517 19,111
OTHER 20,545 21,406
TOTAL LIABILITIES 72,789 70,554
TOTAL SHAREHOLDERS' EQUITY 70,138 68,709
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $142,927 $139,263
Contact:
P&G Media Contacts :
Paul Fox, 513-983-3465
Jennifer Chelune, 513-983-2570
or
P&G Investor Relations Contact :
John Chevalier, 513-983-9974
Stanley Black & Decker Reports 4Q and Full Year 2013 Results
Business Wire Stanley Black & Decker
15 hours ago
NEW BRITAIN, Conn.--(BUSINESS WIRE)--
Stanley Black & Decker ( SWK ) today announced fourth quarter and full year 2013 financial results.
4Q13 Revenues Increased 9% To $2.9 Billion; Organic Growth Reached 4% As Organic Growth Initiatives Contributed 2 Points
4Q13 Diluted GAAP EPS Was $0.41; Excluding Charges, 4Q13 Diluted EPS Was $1.32
Full Year Revenues Increased 8% To $11.0 Billion; Organic Growth Was 3%
Full Year Diluted GAAP EPS Was $3.26; Excluding Charges, Full Year Diluted EPS Was $4.98
Full Year 2013 Free Cash Flow Of $502 Million; $854 Million Excluding Charges & Payments; Working Capital Turns Reached 8.0
4Q13 Key Points:
Net sales were $2.9 billion, up 9% versus prior year, attributable to volume (+4%) and acquisitions (+6%), partially offset by currency (-1%); price was flat for the quarter.
The gross margin rate for the quarter was 35.5%. Excluding charges, the gross margin rate was 35.6%, down slightly from the prior year rate of 36.0%, as the favorable impact of volume, productivity and cost synergies was more than offset by emerging market currency pressures and lower Security margins.
SG&A expenses were 24.2% of sales. Excluding charges, SG&A expenses were 22.6% of sales, relatively unchanged from the 4Q12 level of 22.5%.
Operating margin was 11.3% of sales. Excluding charges, operating margin was 13.0% of sales, down 50 basis points from prior year.
The tax rate was a benefit of 20.6%. Excluding charges, the rate was 22.1%, in line with expectations.
Working capital turns for the quarter were 8.0, up 0.4 turns from 4Q12. Free cash flow was $698 million, excluding $69 million of charges and payments.
Stanley Black & Deckers Chairman and CEO, John F. Lundgren, commented, During 2013 we made significant progress driving organic growth throughout the organization and the fourth quarter was no exception as the momentum continued from our organic growth initiatives. CDIY and Industrial delivered strong top and bottom line growth in spite of FX headwinds and on-going challenging global market conditions. The Security segments margin recovery is underway with notable improvement in North America and actions to improve Europes margins in place.
As we move into 2014 it is important to note that our long-term strategy and financial objectives remain intact. We are, however, focused on executing previously announced operating and capital allocation actions to boost returns in the near term. These actions demonstrate our commitment to drive sustainable improvements to the Companys cash flow return on investment and drive shareholder value.
4Q13 Segment Results
($ in M) 4Q' 13 Segment Results
Sales Profit Charges 1
Profit
Ex-
Charges 1
Profit
Rate
Profit Rate
Ex-
Charges 1
CDIY $1,456 $209.2 $3.8 $213.0 14.4% 14.6%
Industrial $824 $128.7 $4.0 $132.7 15.6% 16.1%
Security $626 $64.5 $11.6 $76.1 10.3% 12.2%
1 M&A charges primarily pertaining to synergy attainment & facility closures
CDIY segment net sales increased 6% vs. 4Q12 as a result of volume (+7%) and acquisitions (+1%), partially offset by price (-1%) and currency (-1%). Solid organic growth was experienced in all regions led by emerging markets and Europe. European volumes were strong, up 7% with growth in nearly all key countries driven by customer share gains and new product introductions. Emerging markets also grew 8% in the face of difficult market dynamics within certain regions, particularly Latin America. Similar to the prior quarter, solid organic volumes were achieved in North America, up 5%, primarily due to new product introductions, retail promotions and continued strength in the residential construction market. Excluding charges, overall segment profit was 14.6% up 10 bps from the 4Q12 rate of 14.5% as volume and productivity offset investments in organic growth initiatives and currency.
Industrial segment net sales rose 27%. Unit volumes increased approximately 8%, currency was down 1% and acquisitions added 20%. Pricing was flat for the quarter. Organic sales for Industrial and Automotive Repair (IAR) increased a robust 5% primarily as a result of volume increases in North America and Europe. Consistent with prior quarters, volume growth in North America continued to be driven by the MRO vending organic growth initiative and strength within Mac Tools mobile distribution, as well as new product introductions, which more than offset the impact of budgetary cuts on IARs US Government business. European growth was driven primarily by the timing of promotional events. Engineered Fastening posted record fourth quarter revenues for its legacy Emhart business. Organic growth was 5% driven by the global automotive revenues which once again outpaced global light vehicle production. In addition, Infastech continues to progress as planned and is on track to deliver financial commitments. Oil & Gas posted another strong quarter of impressive organic growth (+39%) driven primarily by a continued rebound by North America onshore operations combined with another strong offshore growth performance.
Overall Industrial segment profit excluding charges was 16.1%, consistent with the 4Q12 rate, as the impact of volume and productivity was offset by organic growth investments and currency.
As expected, net sales in Security decreased 2% versus 4Q12 due to volume (-4%) partially offset by price (+1%) and currency (+1%). Organic growth within the CSS North America business was relatively flat. CSS Europe declined 8% organically due primarily to continued softness in certain regions, most notably France and Southern Europe. While CSS Europe order rates remain strong in the low double digits, the conversion of backlog in the quarter did not overcome the attrition rates that remained consistent with the third quarter.
Mechanical Access organic sales were down slightly driven by declines within the commercial mechanical lock business due to the year over year impact of the distributor model transition, partially offset by growth within the automatic door business due to successful door conversion wins, new product introductions and emerging market growth.
Security segment profit rate excluding charges was 12.2%, consistent with the 3Q13 rate. During the quarter, the North America profit rate improved sequentially as a result of CSS operational field productivity. This improvement was offset by continued attrition and field inefficiencies in the Security Europe business. The 400 basis point year over year decline was attributable to the confluence of issues which have been previously communicated. The fourth quarter should represent the last quarter with steep year over year margin rate declines as the fixes take hold and the issues anniversary.
President and Chief Operating Officer, James M. Loree, commented, We remain encouraged by the strong results of CDIY and our Industrial businesses, which have leveraged the growth investments made to date. Growth in these businesses within the developed markets of North America and Europe was exceptional. Organic growth achieved within the emerging markets in the quarter and for the full year was also noteworthy given difficult and volatile regional market conditions and related currency pressures which continue to mount particularly within Latin America. As for Security, we continue to execute the actions we previously communicated to improve revenues and operating margins in both North America and Europe.
As we look forward in 2014, we have strong momentum in about 80% of the portfolio. In Security, the remaining 20%, we have taken cost and other actions to effect a turnaround. We have already seen benefits in Security North America and Europe will gradually improve throughout the year.
Reiteration Of 2014 Outlook
Donald Allan Jr., Senior Vice President and CFO commented, As previously communicated in mid-December our adjusted 2014 EPS will be in the range of $5.30 to $5.50. On a GAAP basis EPS is estimated to be in the range of $5.18 to $5.38 as M&A charges will shrink dramatically in 2014 resulting in convergence of GAAP and adjusted income. We also believe that our 2014 organic growth will approximate 4% including the benefits from our organic growth initiatives. Our 2014 outlook assumes that we will improve Security margins by approximately 150 basis points and that we experience no further significant degradation in currencies beyond current rates. Free cash flow will approximate $675 million inclusive of approximately $250 million of one-time payments primarily relating to restructuring actions.
In addition to continuing to drive organic growth and improving security margins, enhancing our operating leverage is a key priority for 2014. The financial drag from the growth investments made in 2013 is mostly behind us and we will tightly manage SG&A expenses. We also remain committed to our capital allocation plan which provides for a strong and growing dividend as well as the return of $1.5 billion to $2.0 billion of capital to stakeholders over the next two years through debt deleveraging and repurchasing up to $1 billion in stock. The combined impact of these actions is expected to have a significant favorable impact on the Companys cash flow return on investment over the next couple of years.
Merger And Acquisition (M&A) One-Time Charges
4Q13: Total one-time charges in 4Q13 related to M&A charges and cost containment actions, as well as the charges related to the extinguishment of debt were $214.9 million. Gross margin includes $3.1 million of these one-time charges, primarily for integration-related matters, and SG&A includes $46.0 million in one-time charges, primarily for integration-related administration costs and consulting fees, as well as employee-related matters. $19.4 million of these costs that impact the Companys operating margin are included in segment results, with the remainder in corporate overhead. One-time charges of $30.3 million are included in Other, net, primarily related to the extinguishment of debt and deal costs. Lastly, one-time charges of $135.5 million are included in restructuring charges, the majority of which represent Niscayah-related restructuring charges and cost containment actions associated with the severance of employees.
2013: Total one-time charges in 2013 related to M&A charges and cost containment actions, as well as the charges related to the extinguishment of debt were $393.5 million. Gross margin includes $29.5 million of these one-time charges, primarily for integration-related matters, and SG&A includes $136.3 million in one-time charges, primarily for integration-related administration costs and consulting fees, as well as employee-related matters. $76.5 million of these costs that impact the Companys operating margin are included in segment results, with the remainder in corporate overhead. One-time charges of $51.6 million are included in Other, net, primarily related to the extinguishment of debt and deal costs. Lastly, one-time charges of $176.1 million are included in restructuring charges, the majority of which represent Niscayah-related restructuring charges and cost containment actions associated with the severance of employees.
The company will host a conference call with investors today, Friday, January 24, 2014, at 8:00am ET. A slide presentation which will accompany the call will be available at www.stanleyblackanddecker.com and will remain available after the call.
You can also access the slides via the Stanley Black & Decker Investor Relations iPad & iPhone app from the Apple App Store by searching for SWK Investor Relations.
The call will be accessible by telephone within the US at (800) 708-4540, from outside the U.S. at +1 (847) 619-6397, and via the Internet at www.stanleyblackanddecker.com . To participate, please register on the web site at least fifteen minutes prior to the call and download and install any necessary audio software. Please use the conference identification number 3640-8064. A replay will also be available two hours after the call and can be accessed at (888) 843-7419 or +1 (630) 652-3042 using the passcode 3640-8064#.
The replay will also be available as a podcast within 24 hours and can be accessed on our website and via iTunes.
Stanley Black & Decker, an S&P 500 company, is a diversified global provider of hand tools, power tools and related accessories, mechanical access solutions and electronic security solutions, healthcare solutions, engineered fastening systems, and more. Learn more at www.stanleyblackanddecker.com .
These results reflect the Companys continuing operations. The Company sold its Hardware & Home Improvement business (HHI), including the residential portion of Tong Lung in December of 2012. The sale of this business occurred in a First and Second Closing. The First closing, which excluded the residential portion of Tong Lung, occurred on December 17, 2012. The Second closing in which the residential portion of Tong Lung was sold occurred on April 8, 2013. The operating results of HHI have been reported as discontinued operations in 2012. The operating results of the residential portion of Tong Lung have been reported as discontinued operations for 2012 and through the date of sale in 2013. In addition, in 3Q13 the Company classified two small businesses as discontinued operations. The operating results of those businesses have been reported as discontinued operations for all periods presented. Total sales reported as discontinued operations were $38.4 million in 2013 and $973.2 million in 2012.
Organic sales growth is defined as total sales growth less the sales of companies acquired in the past twelve months and any foreign currency impacts. Operating margin is defined as sales less cost of sales and selling, general and administrative expenses. Management uses operating margin and its percentage of net sales as key measures to assess the performance of the Company as a whole, as well as the related measures at the segment level. Free cash flow is defined as cash flow from operations less capital and software expenditures. Management considers free cash flow an important indicator of its liquidity, as well as its ability to fund future growth and to provide a return to the shareowners. Free cash flow does not include deductions for mandatory debt service, other borrowing activity, discretionary dividends on the Companys common stock and business acquisitions, among other items. The normalized statements of operations, cash flows and business segment information, as reconciled to GAAP on pages 13-18 for 2013 and 2012, are considered relevant to aid analysis of the Companys operating performance, earnings results and cash flows aside from the material impact of the one-time charges and payments associated with the Black & Decker merger, the Niscayah and Infastech acquisitions and other smaller acquisitions of the Company. Normalized cash flow and free cash flow, as reconciled from the associated GAAP measures on pages 15-16 for 2013 and 2012 are considered meaningful pro forma metrics to aid the understanding of the Companys cash flow performance aside from the material impact of the M&A-related payments and charges.
CAUTIONARY STATEMENTS
Under the Private Securities Litigation Reform Act of 1995
Statements in this press release and related analyst presentation that are not historical, including but not limited to those regarding the Companys ability to: (i) achieve full year 2014 diluted EPS of $5.30 - $5.50 ($5.18 - $5.38 on a GAAP basis) and 1Q 2014 EPS excluding charges and payments of $0.95-$0.98; (ii) deliver organic growth of approximately 4% in 2014; (iii) generate approximately $675 million of free cash flow for 2014 which includes approximately $250 million of one-time payments; (iv) return $1.5 billion to $2.0 billion of capital to stakeholders over the next two years through debt deleveraging and the repurchase of up to $1 billion in stock (collectively, the Results); are forward looking statements and subject to risk and uncertainty.
The Companys ability to deliver the Results as described above is based on current expectations and involves inherent risks and uncertainties, including factors listed below and other factors that could delay, divert, or change any of them, and could cause actual outcomes and results to differ materially from current expectations. In addition to the risks, uncertainties and other factors discussed in this press release, the risks, uncertainties and other factors that could cause or contribute to actual results differing materially from those expressed or implied in the forward looking statements include, without limitation, those set forth under Item 1A Risk Factors of the Companys Annual Report on Form 10-K and any material changes thereto set forth in any subsequent Quarterly Reports on Form 10-Q, or those contained in the Companys other filings with the Securities and Exchange Commission, and those set forth below.
The Companys ability to deliver the Results is dependent, or based, upon: (i) the Companys ability to execute its integration plans and achieve synergies primarily from the Infastech acquisition sufficient to generate $0.10 of EPS accretion in 2014; (ii) the Companys ability to generate organic net sales increases of approximately 4% in 2014; (iii) the Companys ability to continue to identify and execute upon sales opportunities to increase its CDIY, IAR and Security businesses in the emerging markets while minimizing associated costs; (iv) the Companys ability to achieve a tax rate of approximately 21-22% in 2014; (v) the Companys ability to limit the increase in interest and other expense to approximately $0.10-$0.15 of EPS in 2014; (vi) the Companys ability to improve margins in the Security business by at least 150 basis points in 2014; (vii) the Companys ability to generate approximately $0.20 of EPS accretion in 2014 through cost reductions in its CDIY and Industrial segments and its corporate functions; (viii) the Companys ability to limit one-time charges primarily associated with the Infastech acquisition to $25 million in 2014; (ix) the Companys ability to minimize tax liabilities associated with the HHI divestiture; (x) successful integration of acquisitions completed in 2012 and 2013, and any additional acquisitions completed during the year, as well as integration of existing businesses; (xi) the continued acceptance of technologies used in the Companys products and services; (xii) the Companys ability to manage existing Sonitrol franchisee and Mac Tools relationships; (xiii) the Companys ability to minimize costs associated with any sale or discontinuance of a business or product line, including any severance, restructuring, legal or other costs; (xiv) the proceeds realized with respect to any business or product line disposals; (xv) the extent of any asset impairments with respect to any businesses or product lines that are sold or discontinued; (xvi) the success of the Companys efforts to manage freight costs, steel and other commodity costs as well as capital expenditures; (xvii) the Companys ability to sustain or increase prices in order to, among other things, offset or mitigate the impact of steel, freight, energy, non-ferrous commodity and other commodity costs and any inflation increases; (xviii) the Companys ability to generate free cash flow and maintain a strong debt to capital ratio; (xix) the Companys ability to identify and effectively execute productivity improvements and cost reductions, while minimizing any associated restructuring charges; (xx) the Companys ability to obtain favorable settlement of tax audits; (xxi) the ability of the Company to generate earnings sufficient to realize future income tax benefits during periods when temporary differences become deductible; (xxii) the continued ability of the Company to access credit markets under satisfactory terms; (xxiii) the Companys ability to negotiate satisfactory payment terms under which the Company buys and sells goods, services, materials and products; (xxiv) the Companys ability to successfully develop, market and achieve sales from new products and services; and (xxv) the availability of cash to repurchase shares when conditions are right.
The Companys ability to deliver the Results is also dependent upon: (i) the success of the Companys marketing and sales efforts, including the ability to develop and market new and innovative products in both existing and new markets; (ii) the ability of the Company to maintain or improve production rates in the Companys manufacturing facilities, respond to significant changes in product demand and fulfill demand for new and existing products; (iii) the Companys ability to continue improvements in working capital through effective management of accounts receivable and inventory levels; (iv) the ability to continue successfully managing and defending claims and litigation; (v) the success of the Companys efforts to mitigate any cost increases generated by, for example, increases in the cost of energy or significant Chinese Renminbi or other currency appreciation; (vi) the geographic distribution of the Companys earnings; (vii) the commitment to and success of the Stanley Fulfillment System; and (viii) successful implementation with expected results of cost reduction programs.
The Companys ability to achieve the Results will also be affected by external factors. These external factors include: challenging global macroeconomic environment; the continued economic growth of emerging markets, particularly Latin America; pricing pressure and other changes within competitive markets; the continued consolidation of customers particularly in consumer channels; inventory management pressures on the Companys customers; the impact the tightened credit markets may have on the Company or its customers or suppliers; the extent to which the Company has to write off accounts receivable or assets or experiences supply chain disruptions in connection with bankruptcy filings by customers or suppliers; increasing competition; changes in laws, regulations and policies that affect the Company, including, but not limited to trade, monetary, tax and fiscal policies and laws; the timing and extent of any inflation or deflation; currency exchange fluctuations; the impact of dollar/foreign currency exchange and interest rates on the competitiveness of products and the Companys debt program; the strength of the U.S. and European economies; the extent to which world-wide markets associated with homebuilding and remodeling stabilize and rebound; the impact of events that cause or may cause disruption in the Companys supply, manufacturing, distribution and sales networks such as war, terrorist activities, and political unrest; and recessionary or expansive trends in the economies of the world in which the Company operates. The Company undertakes no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date hereof.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, Millions of Dollars Except Per Share Amounts)
FOURTH QUARTER YEAR TO DATE
2013
2012 2013 2012
NET SALES $ 2,906.0 $ 2,659.5 $ 11,001.2 $ 10,147.9
COSTS AND EXPENSES
Cost of sales 1,875.3 1,713.4 7,068.3 6,452.4
Gross margin 1,030.7 946.1 3,932.9 3,695.5
% of Net Sales 35.5 % 35.6 % 35.7 % 36.4 %
Selling, general and administrative 703.1 636.6 2,714.6 2,499.9
% of Net sales 24.2 % 23.9 % 24.7 % 24.6 %
Operating margin 327.6 309.5 1,218.3 1,195.6
% of Net sales 11.3 % 11.6 % 11.1 % 11.8 %
Other - net 99.2 83.0 308.0 345.3
Restructuring charges 135.5 57.4 176.1 174.0
Income from operations
92.9 169.1 734.2 676.3
Interest - net 38.5 36.1 147.6 134.1
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 54.4 133.0 586.6 542.2
Income tax (benefit) expense on continuing operations (11.2 ) (4.7 ) 69.3 78.2
NET EARNINGS FROM CONTINUING OPERATIONS 65.6 137.7 517.3 464.0
Less: net (loss) earnings attributable to non-controlling interests (0.1 ) 0.4 (1.0 ) (0.8 )
NET EARNINGS FROM CONTINUING OPERATIONS ATTRIBUTABLE
TO COMMON SHAREOWNERS 65.7 137.3 518.3 464.8
(Loss) earnings from discontinued operations before income taxes (9.0 ) 390.8 (42.0 ) 488.8
Income tax expense (benefit) on discontinued operations 0.6 36.0 (14.0 ) 69.8
NET (LOSS) EARNINGS FROM DISCONTINUED OPERATIONS (9.6 ) 354.8 (28.0 ) 419.0
NET EARNINGS ATTRIBUTABLE TO COMMON SHAREOWNERS $ 56.1 $ 492.1 $ 490.3 $ 883.8
BASIC EARNINGS (LOSS) PER SHARE OF COMMON STOCK
Continuing operations $ 0.42 $ 0.85 $ 3.34 $ 2.85
Discontinued operations (0.06 ) 2.20 (0.18 ) 2.57
Total basic earnings per share of common stock ... $ 0.36 $ 3.05 $ 3.16 $ 5.41
DILUTED EARNINGS (LOSS) PER SHARE OF COMMON STOCK
Continuing operations $ 0.41 $ 0.83 $ 3.26 $ 2.79
Discontinued operations (0.06 ) 2.16 (0.18 ) 2.51
Total diluted earnings per share of common stock $ 0.35 $ 2.99 $ 3.09 $ 5.30
DIVIDENDS PER SHARE $ 0.50 $ 0.49 $ 1.98 $ 1.80
AVERAGE SHARES OUTSTANDING (in thousands)
Basic 155,512 161,212 155,237 163,067
Diluted 159,200 164,553 158,776 166,701
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, Millions of Dollars)
December 28, December 29,
2013 2012
ASSETS
Cash and cash equivalents $ 496.2 $ 716.0
Accounts and notes receivable, net 1,633.0 1,525.8
Inventories, net 1,485.8 1,304.6
Assets held for sale 10.1 171.7
Other current assets 338.0 393.2
Total current assets 3,963.1 4,111.3
Property, plant and equipment, net 1,485.3 1,329.9
Goodwill and other intangibles, net 10,632.9 9,947.0
Other assets 454.4 455.8
Total assets $ 16,535.7 $ 15,844.0
LIABILITIES AND SHAREOWNERS' EQUITY
Short-term borrowings $ 402.6 $ 11.5
Accounts payable 1,575.9 1,345.9
Accrued expenses 1,245.4 1,680.0
Liabilities held for sale 6.3 37.3
Total current liabilities 3,230.2 3,074.7
Long-term debt 3,799.4 3,526.5
Other long-term liabilities 2,643.3 2,515.7
Stanley Black & Decker, Inc. shareowners' equity 6,781.5 6,667.1
Non-controlling interests' equity 81.3 60.0
Total liabilities and equity $ 16,535.7 $ 15,844.0
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
SUMMARY OF CASH FLOW ACTIVITY
(Unaudited, Millions of Dollars)
FOURTH QUARTER YEAR TO DATE
2013 2012 2013 2012
OPERATING ACTIVITIES
Net earnings from continuing operations $ 65.6 $ 137.7 $ 517.3 $ 464.0
Net (loss) earnings from discontinued operations (9.6 ) 354.8 (28.0 ) 419.0
Net gains on HHI sale - (358.9 ) (4.7 ) (358.9 )
Depreciation and amortization 118.6 114.7 441.3 445.3
Changes in working capital1 384.0 338.5 12.4 52.5
Other 173.1 (38.7 ) (70.3 ) (55.7 )
Net cash provided by operating activities 731.7 548.1 868.0 966.2
INVESTING AND FINANCING ACTIVITIES
Capital and software expenditures (103.5 ) (126.5 ) (365.6 ) (386.0 )
Acquisitions, net of cash acquired (7.3 ) (12.2 ) (933.9 ) (707.3 )
Proceeds from sale of business / assets 1.0 1,261.6 97.5 1,270.2
Proceeds from long-term borrowings 726.7 794.1 726.7 1,523.5
Premium paid on debt extinguishment (42.8 ) - (42.8 ) (91.0 )
Proceeds from issuances of common stock 15.9 23.5 154.6 126.4
Net short-term (repayments) borrowings (810.8 ) (1,335.4 ) 388.7 (19.1 )
Cash dividends on common stock (77.7 ) (82.7 ) (312.7 ) (304.0 )
Payments on long-term debt (300.5 ) (200.3 ) (302.2 ) (1,422.3 )
Purchases of common stock for treasury (6.6 ) (856.0 ) (39.2 ) (1,073.8 )
Premium paid for equity option (83.2 ) (29.5 ) (83.2 ) (29.5 )
Payment on forward stock purchase contract - - (350.0 ) -
Other (15.8 ) (38.2 ) (25.7 ) (44.2 )
Net cash used in investing and financing activities (704.6 ) (601.6 ) (1,087.8 ) (1,157.1 )
Increase (Decrease) in Cash and Cash Equivalents 27.1 (53.5 ) (219.8 ) (190.9 )
Cash and Cash Equivalents, Beginning of Period 469.1 769.5 716.0 906.9
Cash and Cash Equivalents, End of Period $ 496.2 $ 716.0 $ 496.2 $ 716.0
(1 ) The change in working capital is comprised of accounts receivable, inventory, accounts payable and deferred revenue.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION
(Unaudited, Millions of Dollars)
FOURTH QUARTER YEAR TO DATE
2013 2012 2013 2012
NET SALES
Construction & DIY $ 1,455.4 $ 1,370.8 $ 5,481.1 $ 5,189.9
Industrial 824.4 648.7 3,097.5 2,557.8
Security 626.2 640.0 2,422.6 2,400.2
Total $ 2,906.0 $ 2,659.5 $ 11,001.2 $ 10,147.9
SEGMENT PROFIT
Construction & DIY $ 209.2 $ 188.7 $ 798.0 $ 720.9
Industrial 128.7 100.1 436.2 414.3
Security 64.5 88.3 238.0 312.7
Segment Profit
402.4 377.1 1,472.2 1,447.9
Corporate Overhead (74.8 ) (67.6 ) (253.9 ) (252.3 )
Total
$ 327.6 $ 309.5 $ 1,218.3 $ 1,195.6
Segment Profit as a Percentage of Net Sales
Construction & DIY
14.4 % 13.8 % 14.6 % 13.9 %
Industrial 15.6 % 15.4 % 14.1 % 16.2 %
Security 10.3 % 13.8 % 9.8 % 13.0 %
Segment Profit
13.8 % 14.2 % 13.4 % 14.3 %
Corporate Overhead (2.6 %) (2.5 %) (2.3 %) (2.5 %)
Total
11.3 % 11.6 % 11.1 % 11.8 %
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP EARNINGS FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL MEASURES
(Unaudited, Millions of Dollars Except Per Share Amounts)
FOURTH QUARTER 2013
Reported
Merger &
Acquisition-
Related and
Other
Charges1
Normalized2
Gross margin
$ 1,030.7 $ 3.1 $ 1,033.8
% of Net Sales
35.5 % 35.6 %
Selling, general and administrative
703.1 (46.0 ) 657.1
% of Net Sales
24.2 % 22.6 %
Operating margin 327.6 49.1 376.7
% of Net Sales 11.3 % 13.0 %
Earnings from continuing operations before income taxes 54.4 214.9 269.3
Income tax (benefit) expense on continuing operations (11.2 ) 70.8 59.6
Net earnings from continuing operations 65.7 144.1 209.8
Diluted earnings per share of common stock $ 0.41 $ 0.91 $ 1.32
(1 ) Merger and acquisition-related and other charges relate primarily to the Black & Decker merger and Niscayah and Infastech acquisitions, including facility closure-related charges, employee-related charges and integration costs, as well as cost containment charges. Other charges relate to the loss on extinguishment of debt.
(2 ) The normalized 2013 information, as reconciled to GAAP above, is considered relevant to aid analysis of the Company’s margin and earnings results aside from the material impact of the merger & acquisition-related charges as well as charges associated with the loss on extinguishment of debt.
FOURTH QUARTER 2012
Reported
Merger &
Acquisition-
Related
Charges3
Normalized4
Gross margin $ 946.1 $ 11.3 $ 957.4
% of Net Sales 35.6 % 36.0 %
Selling, general and administrative 636.6 (38.5 ) 598.1
% of Net Sales 23.9 % 22.5 %
Operating margin 309.5 49.8 359.3
% of Net Sales 11.6 % 13.5 %
Earnings from continuing operations before income taxes 133.0 131.4 264.4
Income taxes (benefit) on continuing operations (4.7 ) 36.4 31.7
Net earnings from continuing operations 137.3 95.0 232.3
Diluted earnings per share of common stock $ 0.83 $ 0.58 $ 1.41
(3 ) Merger and acquisition-related charges relate primarily to the Black & Decker merger and Niscayah acquisition, including facility closure-related charges, employee-related charges and integration costs.
(4 ) The normalized 2012 information, as reconciled to GAAP above, is considered relevant to aid analysis of the Company’s margin and earnings results aside from the material impact of the merger & acquisition-related charges.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP EARNINGS FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL MEASURES
(Unaudited, Millions of Dollars Except Per Share Amounts)
YEAR TO DATE 2013
Reported
Merger &
Acquisition-
Related and
Other
Charges1
Normalized3
Gross margin $ 3,932.9 29.5 $ 3,962.4
% of Net Sales 35.7 % 36.0 %
Selling, general and administrative 2,714.6 (136.3 ) 2,578.3
% of Net Sales 24.7 % 23.4 %
Operating margin 1,218.3 165.8 1,384.1
% of Net Sales 11.1 % 12.6 %
Earnings from continuing operations before income taxes 586.6 393.5 980.1
Income taxes on continuing operations 69.3 120.8 190.1
Net earnings from continuing operations 518.3 272.7 791.0
Diluted earnings per share of common stock $ 3.26 $ 1.72 $ 4.98
(1 ) Merger and acquisition-related and other charges relate primarily to the Black & Decker merger and Niscayah and Infastech acquisitions, including facility closure-related charges, employee-related charges and integration costs, as well as cost containment charges. Other charges relate to the loss on extinguishment of debt.
YEAR TO DATE 2012
Reported
Merger &
Acquisition-
Related and
Other
Charges2
Normalized3
Gross margin $ 3,695.5 29.6 $ 3,725.1
% of Net Sales 36.4 % 36.7 %
Selling, general and administrative 2,499.9 (138.4 ) 2,361.5
% of Net Sales 24.6 % 23.3 %
Operating margin 1,195.6 168.0 1,363.6
% of Net Sales 11.8 % 13.4 %
Earnings from continuing operations before income taxes 542.2 442.2 984.4
Income taxes on continuing operations 78.2 113.0 191.2
Net earnings from continuing operations 464.8 329.2 794.0
Diluted earnings per share of common stock $ 2.79 $ 1.97 $ 4.76
(2 ) Merger and acquisition-related charges relate primarily to the Black & Decker merger and Niscayah acquisition, including facility closure-related charges, employee-related charges, integration costs, as well as cost containment charges. Other charges relate to the loss on extinguishment of debt.
(3 ) The normalized 2013 and 2012 information, as reconciled to GAAP above, is considered relevant to aid analysis of the Company’s margin and earnings results aside from the material impact of the merger & acquisition-related charges as well as charges associated with the loss on extinguishment of debt.
STANLEY BLACK & DECKER INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP CASH FLOW FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL MEASURES
(Unaudited, Millions of Dollars)
FOURTH QUARTER 2013
Reported
Merger &
Acquisition-
Related
Charges and
Payments1
Normalized4
Free Cash Flow Computation3
Net cash provided by operating activities $ 731.7 56.3 $ 788.0
Less: capital and software expenditures (103.5 ) 13.1 (90.4 )
Free Cash Inflow (before dividends) $ 628.2 $ 697.6
(1 ) Merger and acquisition-related charges and payments relate primarily to the Black & Decker merger and Niscayah and Infastech acquisitions, including facility closure-related charges, employee-related charges and integration costs, as well as cost containment charges.
FOURTH QUARTER 2012
Reported
Merger &
Acquisition-
Related
Charges and
Payments2
Normalized4
Free Cash Flow Computation3
Net cash provided by operating activities $ 548.1 144.3 $ 692.4
Less: capital and software expenditures (126.5 ) 30.4 (96.1 )
Free Cash Inflow (before dividends) $ 421.6 $ 596.3
(2 ) Merger and acquisition-related charges and payments relate primarily to the Black & Decker merger and Niscayah acquisition, including facility closure-related charges, employee-related charges, integration costs, as well as cost containment charges.
(3, 4 ) Free cash flow is defined as cash flow from operations less capital and software expenditures. Management considers free cash flow an important measure of its liquidity, as well as its ability to fund future growth and to provide a return to the shareowners. Free cash flow does not include deductions for mandatory debt service, other borrowing activity, discretionary dividends on the Company’s common stock and business acquisitions, among other items. Normalized cash flow and free cash flow, as reconciled above, are considered meaningful pro forma metrics to aid the understanding of the Company's cash flow performance aside from the material impact of merger and acquisition-related activities.
STANLEY BLACK & DECKER INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP CASH FLOW FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL MEASURES
(Unaudited, Millions of Dollars)
YEAR TO DATE 2013
Reported
Merger &
Acquisition-
Related
Charges and
Payments1
Normalized4
Free Cash Flow Computation3
Net cash provided by operating activities $ 868.0 280.0 $ 1,148.0
Less: capital and software expenditures (365.6 ) 71.7 (293.9 )
Free Cash Inflow (before dividends) $ 502.4 $ 854.1
(1 ) Merger and acquisition-related charges and payments relate primarily to the Black & Decker merger and Niscayah and Infastech acquisitions, including facility closure-related charges, employee-related charges and integration costs, as well as cost containment charges.
YEAR TO DATE 2012
Reported
Merger &
Acquisition-
Related
Charges and
Payments2
Normalized4
Free Cash Flow Computation3
Net cash provided by operating activities $ 966.2 356.5 $ 1,322.7
Less: capital and software expenditures (386.0 ) 122.4 (263.6 )
Free Cash Inflow (before dividends) $ 580.2 $ 1,059.1
(2 ) Merger and acquisition-related charges and payments relate primarily to the Black & Decker merger and Niscayah acquisition, including facility closure-related charges, employee-related charges, integration costs, as well as cost containment charges.
(3, 4 ) Free cash flow is defined as cash flow from operations less capital and software expenditures. Management considers free cash flow an important measure of its liquidity, as well as its ability to fund future growth and to provide a return to the shareowners. Free cash flow does not include deductions for mandatory debt service, other borrowing activity, discretionary dividends on the Company’s common stock and business acquisitions, among other items. Normalized cash flow and free cash flow, as reconciled above, are considered meaningful pro forma metrics to aid the understanding of the Company's cash flow performance aside from the material impact of merger and acquisition-related activities.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP SEGMENT PROFIT FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL MEASURES
(Unaudited, Millions of Dollars)
FOURTH QUARTER 2013
Reported
Merger &
Acquisition-
Related
Charges1
Normalized3
SEGMENT PROFIT
Construction & DIY $ 209.2 $ 3.8 $ 213.0
Industrial 128.7 4.0 132.7
Security 64.5 11.6 76.1
Segment Profit
402.4 19.4 421.8
Corporate Overhead (74.8 ) 29.7 (45.1 )
Total
$ 327.6 $ 49.1 $ 376.7
Segment Profit as a Percentage of Net Sales
Construction & DIY 14.4 % 14.6 %
Industrial 15.6 % 16.1 %
Security 10.3 % 12.2 %
Segment Profit 13.8 % 14.5 %
Corporate Overhead (2.6 %) (1.6 %)
Total 11.3 % 13.0 %
(1 ) Merger and acquisition-related charges relate primarily to the Black & Decker merger and Niscayah and Infastech acquisitions, including facility closure-related charges, employee-related charges and integration costs.
FOURTH QUARTER 2012
Reported
Merger &
Acquisition-
Related
Charges2
Normalized3
SEGMENT PROFIT
Construction & DIY $ 188.7 $ 10.7 $ 199.4
Industrial 100.1 4.3 104.4
Security 88.3 15.4 103.7
Segment Profit 377.1 30.4 407.5
Corporate Overhead (67.6 ) 19.4 (48.2 )
Total $ 309.5 $ 49.8 $ 359.3
Segment Profit as a Percentage of Net Sales
Construction & DIY 13.8 % 14.5 %
Industrial 15.4 % 16.1 %
Security 13.8 % 16.2 %
Segment Profit 14.2 % 15.3 %
Corporate Overhead (2.5 %) (1.8 %)
Total 11.6 % 13.5 %
(2 ) Merger and acquisition-related charges relate primarily to the Black & Decker merger and Niscayah acquisition, including facility closure-related charges, employee-related charges and integration costs.
(3 ) The normalized 2013 and 2012 information, as reconciled to GAAP above, is considered relevant to aid analysis of the Company’s margin and earnings results aside from the material impact of the merger & acquisition-related charges.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP SEGMENT PROFIT FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL MEASURES
(Unaudited, Millions of Dollars)
YEAR TO DATE 2013
Reported
Merger &
Acquisition-
Related
Charges1
Normalized3
SEGMENT PROFIT
Construction & DIY $ 798.0 $ 13.0 $ 811.0
Industrial 436.2 24.8 461.0
Security 238.0 38.7 276.7
Segment Profit
1,472.2 76.5 1,548.7
Corporate Overhead (253.9 ) 89.3 (164.6 )
Total
$ 1,218.3 $ 165.8 $ 1,384.1
Segment Profit as a Percentage of Net Sales
Construction & DIY 14.6 % 14.8 %
Industrial 14.1 % 14.9 %
Security 9.8 % 11.4 %
Segment Profit 13.4 % 14.1 %
Corporate Overhead (2.3 %) (1.5 %)
Total 11.1 % 12.6 %
(1 ) Merger and acquisition-related charges relate primarily to the Black & Decker merger and Niscayah and Infastech acquisitions, including facility closure-related charges, employee-related charges and integration costs.
YEAR TO DATE 2012
Reported
Merger &
Acquisition-
Related
Charges2
Normalized3
SEGMENT PROFIT
Construction & DIY $ 720.9 $ 41.7 $ 762.6
Industrial 414.3 7.9 422.2
Security 312.7 41.3 354.0
Segment Profit 1,447.9 90.9 1,538.8
Corporate Overhead (252.3 ) 77.1 (175.2 )
Total $ 1,195.6 $ 168.0 $ 1,363.6
Segment Profit as a Percentage of Net Sales
Construction & DIY 13.9 % 14.7 %
Industrial 16.2 % 16.5 %
Security 13.0 % 14.7 %
Segment Profit 14.3 % 15.2 %
Corporate Overhead (2.5 %) (1.7 %)
Total 11.8 % 13.4 %
(2 ) Merger and acquisition-related charges relate primarily to the Black & Decker merger and Niscayah acquisition, including facility closure-related charges, employee-related charges, integration costs.
(3 ) The normalized 2013 and 2012 information, as reconciled to GAAP above, is considered relevant to aid analysis of the Company’s margin and earnings results aside from the material impact of the merger & acquisition-related charges.
Contact:
Stanley Black & Decker
Greg Waybright, 860-827-3833
Vice President, Investor & Government Relations
greg.waybright@sbdinc.com
Northern Trust Corporation Reports Fourth Quarter Net Income of $169.7 Million, Earnings Per Common Share of $0.70.
Full Year Net Income of $731.3 Million, Earnings Per Common Share of $2.99.
Business Wire Northern Trust Corporation
January 22, 2014 7:35 AM
CHICAGO--(BUSINESS WIRE)--
Northern Trust Corporation today reported fourth quarter net income per diluted common share of $0.70, up from $0.69 in the fourth quarter of 2012 and down from $0.84 in the third quarter of 2013. Net income was $169.7 million in the current quarter, up 1% from $167.7 million in the prior year fourth quarter, and down 18% from $206.5 million in the prior quarter. Return on average common equity was 8.7% in the current quarter, compared to 8.8% in the prior year quarter and 10.6% in the prior quarter.
The current quarter includes a $19.2 million pre-tax charge ($11.9 million after tax, or $0.05 per common share) in connection with an agreement to resolve certain long-standing class action litigation. Excluding the charge, fourth quarter results would have reflected net income per common share of $0.75, net income of $181.6 million, and return on average common equity of 9.3%. The prior quarter included a $32.6 million pre-tax gain ($20.3 million after tax, or $0.08 per common share) on the sale of an office building property. Excluding the gain, the prior quarter results would have reflected net income per common share of $0.76, net income of $186.2 million, and return on average common equity of 9.6%.
Reported net income per common share for the full year was $2.99, compared to the prior years $2.81 per common share. Net income for 2013 totaled $731.3 million, up $44.0 million, or 6%, from the prior years $687.3 million.
Frederick H. Waddell, Chairman and Chief Executive Officer, commented, Our fourth quarter and full year results reflect continued focus on serving our clients and improving the profitability and returns of our business. Our return on equity improved to 9.5% in 2013 from 9.3% in 2012 and 8.6% in 2011. We increased our quarterly dividend to $0.31 per share and repurchased 5.5 million shares in 2013, returning $609.0 million in capital to our shareholders compared to $449.8 million in 2012.
"Strong new business and higher equity markets drove client assets under custody and under management up 16% and 17%, respectively, compared to the prior year.
"Despite 8% growth in trust, investment and other servicing fees, overall revenue growth of 5% in 2013 was dampened by the challenging interest rate environment. Expense growth of 4% reflects the growth in our business and ongoing investment to support technology initiatives and regulatory and compliance requirements.
FOURTH QUARTER 2013 PERFORMANCE VS. FOURTH QUARTER 2012
Net income per common share was $0.70 in the fourth quarter of 2013 compared to $0.69 in the fourth quarter of 2012. Net income for the current quarter was $169.7 million, up 1% from $167.7 million in the prior year quarter. The current quarter includes the $19.2 million pre-tax charge in connection with the agreement to resolve certain long-standing class action litigation related to the Corporations securities lending program. The prior year quarter included restructuring and integration related pre-tax charges of $8.2 million ($5.2 million after tax, or $0.02 per common share).
Consolidated revenue of $1.05 billion in the current quarter was up $75.5 million, or 8%, from $969.7 million in the prior year quarter. Noninterest income, which represented 76% of revenue, increased $59.8 million, or 8%, to $795.3 million from the prior year quarters $735.5 million, primarily reflecting higher trust, investment and other servicing fees and foreign exchange trading income. Net interest income for the quarter on a fully taxable equivalent (FTE) basis increased $15.5 million, or 7%, to $259.1 million compared to $243.6 million in the prior year quarter, due to higher levels of average earning assets, partially offset by a decrease in the net interest margin.
Trust, investment and other servicing fees were $673.8 million in the current quarter, up $51.2 million, or 8%, from $622.6 million in the prior year quarter. The increase primarily reflects new business and the favorable impact of equity markets, partially offset by higher waived fees in money market mutual funds.
Assets under custody and assets under management are the primary drivers of our trust, investment and other servicing fees. The following table provides the assets under custody and assets under management of Northern Trusts Corporate & Institutional Services (C&IS) and Wealth Management business units.
December 31, September 30, December 31, % Change % Change
($ In Billions) 2013 2013 2012 Q4-13/Q3-13 Q4-13/Q4-12
Assets Under Custody
Corporate & Institutional $ 5,079.7 $ 4,766.5 $ 4,358.6 7 % 17 %
Wealth Management 496.0 470.5 446.3 5 11
Total Assets Under Custody $ 5,575.7 $ 5,237.0 $ 4,804.9 6 % 16 %
Assets Under Management
Corporate & Institutional $ 662.7 $ 634.6 $ 561.2 4 % 18 %
Wealth Management 221.8 211.6 197.7 5 12
Total Assets Under Management $ 884.5 $ 846.2 $ 758.9 5 % 17 %
C&IS trust, investment and other servicing fees increased $26.8 million, or 8%, to $371.1 million in the current quarter from the prior year quarters $344.3 million.
...
Q4 Q4
Change Q4 2013
($ In Millions) 2013 2012
from Q4 2012
C&IS Trust, Investment and Other Servicing Fees
Custody and Fund Administration $ 251.3 $ 224.7 $ 26.6 12 %
Investment Management 74.9 74.2 0.7 1
Securities Lending 21.8 20.3 1.5 7
Other 23.1 25.1 (2.0) (8)
Total $ 371.1 $ 344.3 $ 26.8 8 %
Custody and fund administration fees, the largest component of C&IS fees, increased 12%, primarily driven by new business and the favorable impact of equity markets. C&IS investment management fees increased 1%. New business and the favorable impact of equity markets were offset by higher waived fees in money market mutual funds.
Money market mutual fund fee waivers in C&IS, attributable to persistent low short-term interest rates, totaled $14.7 million in the current quarter, compared to waived fees of $5.7 million in the prior year quarter. Securities lending revenue increased 7%, primarily reflecting higher volumes in the current quarter.
Trust, investment and other servicing fees in Wealth Management totaled $302.7 million in the current quarter, increasing $24.4 million, or 9%, from $278.3 million in the prior year quarter. The increased fees in the current quarter are primarily due to higher equity markets and new business, partially offset by higher waived fees in money market mutual funds. Money market mutual fund fee waivers in Wealth Management totaled $16.2 million in the current quarter compared with $9.6 million in the prior year quarter.
Foreign exchange trading income totaled $50.8 million, up $10.0 million, or 25%, compared with $40.8 million in the prior year quarter. The increase is attributable to higher trading volumes and currency market volatility compared to the prior year quarter.
Other operating income totaled $38.2 million in the current quarter, up 8% from $35.7 million in the prior year quarter.
Net interest income for the quarter on an FTE basis totaled $259.1 million, up $15.5 million, or 7%, compared to $243.6 million in the prior year quarter. The increase is the result of higher levels of average earning assets, partially offset by a decline in the net interest margin to 1.12% from 1.17% in the prior year quarter. Average earning assets for the quarter were $91.60 billion, up $8.71 billion, or 11%, from $82.89 billion in the prior year quarter, due to higher levels of client deposits and short-term borrowings. The decline in the net interest margin primarily reflects lower yields on earning assets, partially offset by a lower cost of interest-related funds.
The provision for credit losses was $5.0 million in both the current quarter and the prior year quarter. Net charge-offs totaled $14.6 million for the current quarter, resulting from $19.5 million of charge-offs and $4.9 million of recoveries, compared to $5.4 million of net charge-offs in the prior year quarter, resulting from $16.1 million of charge-offs and $10.7 million of recoveries. Nonperforming assets were relatively unchanged from the prior year quarter.
Residential real estate loans and commercial real estate loans accounted for 72% and 19%, respectively, of total nonperforming loans and leases at December 31, 2013.
The table below provides information regarding nonperforming assets, the allowance for credit losses, and associated ratios.
December 31, September 30, December 31,
($ In Millions) 2013 2013 2012
Nonperforming Assets
Nonperforming Loans and Leases $ 262.8 $ 270.1 $ 254.8
Other Real Estate Owned 11.9 13.9 20.3
Total Nonperforming Assets 274.7 284.0 275.1
Allowance for Credit Losses
Allowance for Credit Losses Assigned to:
Loans and Leases 278.1 287.2 297.9
Undrawn Loan Commitments and Standby Letters of Credit
29.8 30.3 29.7
Total Allowance for Credit Losses $ 307.9 $ 317.5 $ 327.6
Ratios
Nonperforming Loans and Leases to Total Loans and Leases
0.89 % 0.93 % 0.86 %
Allowance for Credit Losses Assigned to Loans
and Leases to Total Loans and Leases 0.95 % 0.99 % 1.01 %
Allowance for Credit Losses Assigned to Loans and
Leases to Nonperforming Loans and Leases
1.1x 1.1x 1.2x
Noninterest expense totaled $794.5 million in the current quarter, up $53.0 million, or 7%, from $741.5 million in the prior year quarter, reflecting the current quarter $19.2 million pre-tax charge as well as higher compensation, outside services, and equipment and software expense.
Compensation expense, the largest component of noninterest expense, equaled $334.8 million, up $18.5 million, or 6%, from $316.3 million in the prior year quarter, primarily attributable to higher staff levels. Staff on a full-time equivalent basis at December 31, 2013 totaled approximately 14,800, up 4% from a year ago. Employee benefit expense equaled $66.5 million, up 4% from $63.9 million in the prior year quarter.
Expense associated with outside services totaled $152.1 million, up $11.4 million, or 8%, from $140.7 million in the prior year quarter. The current quarter increase is primarily attributable to higher consulting expense, including costs associated with a growing set of regulatory and compliance requirements, as well as higher technical services and sub-custodian expense.
Equipment and software expense totaled $98.6 million, up $8.1 million, or 9%, from $90.5 million in the prior year quarter. The current quarter includes higher software amortization and related software support costs associated with the continued investment in technology related assets.
Occupancy expense equaled $43.8 million, down 5% from $46.2 million in the prior year quarter. The prior year quarter included $3.0 million of restructuring charges related to reductions in office space.
Other operating expense totaled $98.7 million, up $14.8 million, or 18%, from $83.9 million in the prior year quarter. The current quarter includes the $19.2 million pre-tax charge. The prior year quarter included $3.3 million of restructuring and integration related charges. Excluding the current and prior year charges, other operating expense decreased by 1% from the prior year quarter.
Income tax expense was $76.0 million in the current quarter, representing an effective tax rate of 30.9%, and $55.5 million in the prior year quarter, representing an effective tax rate of 24.9%. These compare to full year 2013 and 2012 effective tax rates of 32.0% and 30.7%, respectively. The prior year quarter included an $11.7 million tax benefit in connection with the resolution of certain leveraged lease related matters.
FOURTH QUARTER 2013 PERFORMANCE VS. THIRD QUARTER 2013
Net income per common share was $0.70 in the current quarter, compared with $0.84 in the third quarter of 2013. Net income for the current quarter totaled $169.7 million, down $36.8 million, or 18%, from $206.5 million in the prior quarter. Excluding the current quarter $19.2 million pre-tax charge in connection with the legal settlement, net income per common share and net income would have been $0.75 and $181.6 million, respectively. Excluding the prior quarter $32.6 million pre-tax gain on the sale of an office building property, net income per common share and net income in the prior quarter would have been $0.76 and $186.2 million, respectively.
Consolidated revenue was $1.05 billion in both the current and prior quarter. Excluding the prior quarter gain, consolidated revenue in the current quarter increased 3% as compared to the prior quarter. Noninterest income in the current quarter decreased $14.9 million, or 2%, to $795.3 million from the prior quarter’s $810.2 million, primarily attributable to lower other operating income and foreign exchange trading income, partially offset by higher trust, investment and other servicing fees. Net interest income for the current quarter on an FTE basis increased $14.3 million, or 6%, to $259.1 million from $244.8 million in the prior quarter, due to higher levels of average earning assets, partially offset by a decline in the net interest margin.
Trust, investment and other servicing fees totaled $673.8 million in the current quarter, up $25.8 million, or 4%, from $648.0 million in the prior quarter, primarily reflecting higher equity markets and new business.
C&IS trust, investment and other servicing fees totaled $371.1 million in the current quarter, up $11.3 million, or 3%, from $359.8 million in the prior quarter.
Q4 Q3
Change Q4 2013
($ In Millions) 2013 2013
from Q3 2013
C&IS Trust, Investment and Other Servicing Fees
Custody and Fund Administration $ 251.3 $ 239.4 $ 11.9 5 %
Investment Management 74.9 71.3 3.6 5
Securities Lending 21.8 22.7 (0.9) (4)
Other 23.1 26.4 (3.3) (12)
Total $ 371.1 $ 359.8 $ 11.3 3 %
C&IS custody and fund administration fees increased 5%, primarily driven by new business and the favorable impact of equity markets. Investment management fees, which include waived fees in money market mutual funds attributable to the low short-term interest rates, increased 5%, primarily due to new business and higher equity markets. Money market mutual fund fee waivers totaled $14.7 million in C&IS in the current quarter, compared to $15.3 million in the prior quarter. Securities lending revenue decreased 4%, reflecting lower volumes in the current quarter.
Wealth Management trust, investment and other servicing fees were $302.7 million, up $14.5 million, or 5%, from $288.2 million in the prior quarter, primarily due to higher equity markets and new business. Money market mutual fund fee waivers in Wealth Management totaled $16.2 million in the current quarter, compared to $17.1 million in the prior quarter.
Foreign exchange trading income decreased $12.0 million, or 19%, to $50.8 million compared to $62.8 million in the prior quarter. The current quarter decrease reflects lower currency market volatility and trading volumes.
Other operating income in the current quarter totaled $38.2 million, down $29.0 million, or 43%, from $67.2 million in the prior quarter. The prior quarter included the $32.6 million pre-tax gain on the sale of an office building property. Excluding the prior quarter gain, other operating income in the current quarter increased by 10%.
Net interest income on an FTE basis in the current quarter totaled $259.1 million, up $14.3 million, or 6%, compared to $244.8 million in the prior quarter. The increase is primarily the result of higher levels of average earning assets, partially offset by a decline in the net interest margin. Average earning assets totaled $91.60 billion in the current quarter, up $6.07 billion, or 7%, compared to $85.53 billion in the prior quarter. The net interest margin decreased to 1.12% in the current quarter from 1.14% in the prior quarter, reflecting lower yields on earning assets, partially offset by a lower cost of interest-related funds.
The provision for credit losses totaled $5.0 million in both the current quarter and the prior quarter. Net charge-offs totaled $14.6 million for the current quarter resulting from $19.5 million of charge-offs and $4.9 million of recoveries, compared to $8.3 million of net charge-offs in the prior quarter resulting from $11.6 million of charge-offs and $3.3 million of recoveries. Nonperforming assets declined 3% as compared to the prior quarter.
Noninterest expense totaled $794.5 million in the current quarter, up $53.8 million, or 7% from $740.7 million in the prior quarter. Excluding the current quarter $19.2 million pre-tax charge, noninterest expense as compared to the prior quarter increased $34.6 million, or 5%, primarily reflecting higher compensation, outside services and other operating expense in the current quarter.
Compensation expense totaled $334.8 million for the current quarter, up $10.2 million, or 3%, from $324.6 million in the prior quarter, primarily reflecting higher staff levels. Employee benefit expense totaled $66.5 million for the current quarter, up 5% from $63.5 million in the prior quarter, primarily due to higher costs associated with employee medical benefits.
Expense for outside services totaled $152.1 million, an increase of $6.2 million, or 4%, compared to $145.9 million in the prior quarter, primarily reflecting higher expense for legal services and increased sub-custodian expense in the current quarter.
Equipment and software expense totaled $98.6 million in the current quarter, up 3% from $95.5 million in the prior quarter. Occupancy expense totaled $43.8 million, relatively unchanged from $43.3 million in the prior quarter.
Other operating expense totaled $98.7 million, up $30.8 million, or 45%, from $67.9 million in the prior quarter. Excluding the current quarter $19.2 million pre-tax charge, other operating expense as compared to the prior quarter increased $11.6 million, or 17%, primarily reflecting higher charges associated with other account servicing activities as well as increased business promotion expense.
Total income tax expense was $76.0 million for the current quarter, representing an effective tax rate of 30.9%. Income tax expense was $95.0 million in the prior quarter, representing an effective tax rate of 31.5%.
FULL YEAR 2013 PERFORMANCE VS. FULL YEAR 2012
Reported net income per common share for the full year was $2.99, compared to the prior full year’s $2.81 per common share. Net income for 2013 totaled $731.3 million, up $44.0 million, or 6%, from the prior year’s $687.3 million. The performance in 2013 produced a return on average common equity of 9.5% compared to 9.3% in 2012. The return on average assets was 0.8% in 2013 compared with 0.7% in 2012.
The current year includes the $19.2 million pre-tax charge in connection with the legal settlement and a $12.4 million pre-tax write-off of certain fee receivables resulting from the correction of an accrual methodology followed in prior years, offset by the $32.6 million pre-tax gain on the sale of an office building property. The prior year included restructuring, acquisition and integration related pre-tax charges of $18.6 million, partially offset by the $11.7 million tax benefit in connection with the resolution of certain leveraged lease related matters. Excluding these current and prior year items, net income per common share and return on average common equity in both periods would have been unchanged from their reported amounts, while net income would have been $730.7 million in 2013, up $43.1 million, or 6%, from $687.6 million in 2012.
Consolidated revenue totaled $4.09 billion in 2013, an increase of $193.2 million, or 5%, from $3.90 billion in the prior year. Noninterest income increased $250.4 million, or 9%, to $3.16 billion from $2.91 billion in 2012, primarily reflecting higher trust, investment and other servicing fees and foreign exchange trading income. The increased noninterest income was partially offset by lower net interest income.
Net interest income on an FTE basis in 2013 totaled $965.6 million, a decrease of $65.5 million, or 6%, compared to $1.03 billion in 2012, primarily due to a decline in the net interest margin, partially offset by higher levels of average earning assets.
Noninterest expense totaled $2.99 billion in 2013, up $115.0 million, or 4%, from $2.88 billion in the prior year. The current year includes higher compensation and outside services expense, the $19.2 million pre-tax charge and higher charges associated with other account servicing activities, higher equipment and software expense, and increases in various other miscellaneous categories of other operating expense. The prior year included the $18.6 million pre-tax restructuring, acquisition and integration related charges.
STOCKHOLDERS’ EQUITY
Total stockholders’ equity averaged $7.78 billion, up 3% from the prior year quarter’s average of $7.55 billion. The increase is primarily attributable to earnings, partially offset by dividend declarations and the repurchase of common stock pursuant to the Corporation’s share buyback program. During the three months and year ended December 31, 2013, the Corporation repurchased 2,144,788 shares at a cost of $122.9 million ($57.31 average price per share) and 5,545,401 shares at a cost of $310.0 million ($55.90 average price per share), respectively. The Corporation is authorized by its board of directors to repurchase up to 7.9 million common shares after December 31, 2013.
As reflected in the table below, the risk-based capital ratios of Northern Trust and its principal subsidiary bank, The Northern Trust Company, remained strong at December 31, 2013, with all ratios exceeding the U.S. regulatory requirements for classification as “well capitalized” institutions.
December 31, 2013 September 30, 2013 December 31, 2012
Tier 1 Total Leverage Tier 1 Total Leverage Tier 1 Total Leverage
Capital Capital Ratio Capital Capital Ratio Capital Capital Ratio
Northern Trust Corporation 13.4 % 15.8 % 7.9 % 13.6 % 14.9 % 8.3 % 12.8 % 14.3 % 8.2 %
The Northern Trust Company 11.5 % 14.3 % 6.8 % 11.7 % 13.3 % 7.2 % 11.9 % 13.7 % 7.6 %
Minimum to Qualify as
Well Capitalized
6.0 % 10.0 % 5.0 % 6.0 % 10.0 % 5.0 % 6.0 % 10.0 % 5.0 %
The following table provides the Corporation’s ratios of tier 1 capital and of tier 1 common equity to risk-weighted assets, as well as a reconciliation of tier 1 capital calculated in accordance with applicable U.S. regulatory requirements and GAAP to tier 1 common equity.
December 31, September 30, December 31,
($ In Millions) 2013 2013 2012
Ratios
Tier 1 Capital 13.4 % 13.6 % 12.8 %
Tier 1 Common Equity 12.9 % 13.1 % 12.4 %
Tier 1 Capital $ 7,853.2 $ 7,849.5 $ 7,489.0
Less: Floating Rate Capital Securities 268.8 268.8 268.7
Tier 1 Common Equity $ 7,584.4 $ 7,580.7 $ 7,220.3
Northern Trust is providing the tier 1 common equity ratio, a non-GAAP financial measure, in addition to its capital ratios prepared in accordance with regulatory requirements and GAAP as it is a measure that Northern Trust and investors use to assess capital adequacy.
RECONCILIATION OF REPORTED NET INTEREST INCOME TO FULLY TAXABLE EQUIVALENT
Net interest income stated on an FTE basis is a non-GAAP financial measure that facilitates the analysis of asset yields. Management believes an FTE presentation provides a clearer indication of net interest margins for comparative purposes. When adjusted to an FTE basis, yields on taxable, nontaxable, and partially taxable assets are comparable; however, the adjustment to an FTE basis has no impact on net income. The tables below present a reconciliation of interest income and net interest income prepared in accordance with GAAP to interest income and net interest income on an FTE basis.
Three Months Ended
December 31, 2013 September 30, 2013 December 31, 2012
($ In Millions) Reported FTE Adj. FTE Reported FTE Adj. FTE Reported FTE Adj. FTE
Net Interest Income
Interest Income $ 302.4 $ 9.2 $ 311.6 $ 291.1 $ 7.8 $ 298.9 $ 302.1 $ 9.4 $ 311.5
Interest Expense 52.5 – 52.5 54.1 – 54.1 67.9 – 67.9
Net Interest Income $ 249.9 $ 9.2 $ 259.1 $ 237.0 $ 7.8 $ 244.8 $ 234.2 $ 9.4 $ 243.6
Net Interest Margin 1.08 % 1.12 % 1.10 % 1.14 % 1.12 % 1.17 %
Twelve Months Ended
December 31, 2013 December 31, 2012
($ In Millions) Reported FTE Adj. FTE Reported FTE Adj. FTE
Net Interest Income
Interest Income $ 1,155.5 $ 32.5 $ 1,188.0 $ 1,287.7 $ 40.8 $ 1,328.5
Interest Expense 222.4 – 222.4 297.4 – 297.4
Net Interest Income $ 933.1 $ 32.5 $ 965.6 $ 990.3 $ 40.8 $ 1,031.1
Net Interest Margin 1.09 % 1.13 % 1.18 % 1.22 %
FORWARD-LOOKING STATEMENTS
This news release may be deemed to include forward-looking statements, such as statements that relate to Northern Trust's financial goals, capital adequacy, dividend policy, expansion and business development plans, risk management policies, anticipated expense levels and projected profit improvements, business prospects and positioning with respect to market, demographic and pricing trends, strategic initiatives, re-engineering and outsourcing activities, new business results and outlook, changes in securities market prices, credit quality including allowance levels, planned capital expenditures and technology spending, anticipated tax benefits and expenses, and the effects of any extraordinary events and various other matters (including developments with respect to litigation, other contingent liabilities and obligations, and regulation involving Northern Trust and changes in accounting policies, standards and interpretations) on Northern Trust's business and results. Forward-looking statements are typically identified by words or phrases, such as “believe,” “expect,” “anticipate,” “intend,” “estimate,” “may increase,” “may fluctuate,” “plan,” “goal,” “target,” “strategy,” and similar expressions or future or conditional verbs such as “may,” “will,” “should,” “would,” and “could.” Forward-looking statements are Northern Trust’s current estimates or expectations of future events or future results. Actual results could differ materially from those indicated by these statements because the realization of those results is subject to many risks and uncertainties. Northern Trust Corporation’s 2012 Financial Annual Report to Shareholders, including the section of Management’s Discussion and Analysis captioned “Factors Affecting Future Results,” and periodic reports to the Securities and Exchange Commission, including the section captioned “Risk Factors,” contain additional information about factors that could affect actual results, including: economic, market, and monetary policy risks; operational risks; investment performance, fiduciary, and asset servicing risks; credit risks; liquidity risks; holding company risks; regulation risks; litigation risks; tax and accounting risks; strategic and competitive risks; and reputation risks. All forward-looking statements included in this news release are based on information available at the time of the release, and Northern Trust Corporation assumes no obligation to update any forward-looking statement.
WEBCAST OF FOURTH QUARTER EARNINGS CONFERENCE CALL
Northern Trust’s fourth quarter earnings conference call will be webcast live on January 22, 2014. The live call will be conducted at 11.00 a.m. CT and is accessible on Northern Trust’s website at:
http://www.northerntrust.com/financialreleases
The rebroadcast of the live call will be available on Northern Trust’s website from 2:00 p.m. CT on January 22, 2014, for approximately four weeks. Participants will need Windows Mediatm or Adobe Flash software, which can be downloaded for free through Northern Trust’s website. This earnings release can also be accessed at the above web address.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
STATEMENT OF INCOME DATA
($ In Millions Except Per Share Data)
FOURTH QUARTER
2013 2012 % Change (*)
Noninterest Income
Trust, Investment and Other Servicing Fees $ 673.8 $ 622.6 8 %
Foreign Exchange Trading Income 50.8 40.8 25
Treasury Management Fees 17.5 16.4 6
Security Commissions and Trading Income 14.6 20.0 (27 )
Other Operating Income 38.2 35.7 8
Investment Security Gains (Losses), net 0.4 - N/M
Total Noninterest Income 795.3 735.5 8
Net Interest Income
Interest Income 302.4 302.1 -
Interest Expense 52.5 67.9 (23 )
Net Interest Income 249.9 234.2 7
Total Revenue 1,045.2 969.7 8
Provision for Credit Losses 5.0 5.0 -
Noninterest Expense
Compensation 334.8 316.3 6
Employee Benefits 66.5 63.9 4
Outside Services 152.1 140.7 8
Equipment and Software 98.6 90.5 9
Occupancy 43.8 46.2 (5 )
Other Operating Expense 98.7 83.9 18
Total Noninterest Expense 794.5 741.5 7
Income before Income Taxes 245.7 223.2 10
Provision for Income Taxes 76.0 55.5 37
NET INCOME $ 169.7 $ 167.7 1 %
Earnings Allocated to Participating Securities 2.7 2.5 8 %
Earnings Allocated to Common and Potential Common Shares 167.0 165.2 1
Per Common Share
Net Income
Basic $ 0.70 $ 0.69 1 %
Diluted 0.70 0.69 1
Average Common Equity $ 7,775.7 $ 7,552.0 3 %
Return on Average Common Equity 8.66 % 8.83 % (2 )
Return on Average Assets 0.68 % 0.73 % (7 )
Cash Dividends Declared per Common Share $ 0.31 $ 0.30 3 %
Average Common Shares Outstanding (000s)
Basic 238,228 239,456
Diluted 239,656 239,916
Common Shares Outstanding (EOP) (000s) 237,322 268,915
(*) Percentage calculations are based on actual balances rather than the rounded amounts presented in the Supplemental Consolidated Financial Information.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
STATEMENT OF INCOME DATA
FOURTH
THIRD
($ In Millions Except Per Share Data)
QUARTER QUARTER
2013 2013 % Change (*)
Noninterest Income
Trust, Investment and Other Servicing Fees $ 673.8 $ 648.0 4 %
Foreign Exchange Trading Income 50.8 62.8 (19 )
Treasury Management Fees 17.5 17.6 (1 )
Security Commissions and Trading Income 14.6 16.8 (13 )
Other Operating Income 38.2 67.2 (43 )
Investment Security Gains (Losses), net 0.4 (2.2 ) N/M
Total Noninterest Income 795.3 810.2 (2 )
Net Interest Income
Interest Income 302.4 291.1 4
Interest Expense 52.5 54.1 (3 )
Net Interest Income 249.9 237.0 5
Total Revenue 1,045.2 1,047.2 -
Provision for Credit Losses 5.0 5.0 -
Noninterest Expense
Compensation 334.8 324.6 3
Employee Benefits 66.5 63.5 5
Outside Services 152.1 145.9 4
Equipment and Software 98.6 95.5 3
Occupancy 43.8 43.3 1
Other Operating Expense 98.7 67.9 45
Total Noninterest Expense 794.5 740.7 7
Income before Income Taxes 245.7 301.5 (18 )
Provision for Income Taxes 76.0 95.0 (20 )
NET INCOME $ 169.7 $ 206.5 (18 ) %
Earnings Allocated to Participating Securities 2.7 3.5 (23 ) %
Earnings Allocated to Common and Potential Common Shares 167.0 203.0 (18 )
Per Common Share
Net Income
Basic $ 0.70 $ 0.85 (18 ) %
Diluted 0.70 0.84 (17 )
Average Common Equity $ 7,775.7 $ 7,697.8 1 %
Return on Average Common Equity 8.66 % 10.64 % (19 )
Return on Average Assets 0.68 % 0.86 % (21 )
Cash Dividends Declared per Common Share $ 0.31 $ 0.31 - %
Average Common Shares Outstanding (000s)
Basic 238,228 239,930
Diluted 239,656 241,331
Common Shares Outstanding (EOP) (000s) 237,322 238,984
(*) Percentage calculations are based on actual balances rather than the rounded amounts presented in the Supplemental Consolidated Financial Information.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
STATEMENT OF INCOME DATA
($ In Millions Except Per Share Data)
TWELVE MONTHS
2013 2012 % Change (*)
Noninterest Income
Trust, Investment and Other Servicing Fees $ 2,609.8 $ 2,405.5 8 %
Foreign Exchange Trading Income 244.4 206.1 19
Treasury Management Fees 69.0 67.4 2
Security Commissions and Trading Income 68.0 73.6 (8 )
Other Operating Income 166.5 154.9 8
Investment Security Gains (Losses), net (1.5 ) (1.7 ) (9 )
Total Noninterest Income 3,156.2 2,905.8 9
Net Interest Income
Interest Income 1,155.5 1,287.7 (10 )
Interest Expense 222.4 297.4 (25 )
Net Interest Income 933.1 990.3 (6 )
Total Revenue 4,089.3 3,896.1 5
Provision for Credit Losses 20.0 25.0 (20 )
Noninterest Expense
Compensation 1,306.6 1,267.4 3
Employee Benefits 257.5 258.2 -
Outside Services 564.1 529.2 7
Equipment and Software 377.6 366.7 3
Occupancy 173.8 174.4 -
Other Operating Expense 314.2 282.9 11
Total Noninterest Expense 2,993.8 2,878.8 4
Income before Income Taxes 1,075.5 992.3 8
Provision for Income Taxes 344.2 305.0 13
NET INCOME $ 731.3 $ 687.3 6 %
Earnings Allocated to Participating Securities 11.9 10.0 19 %
Earnings Allocated to Common and Potential Common Shares 719.4 677.3 6
Per Common Share
Net Income
Basic $ 3.01 $ 2.82 7 %
Diluted 2.99 2.81 6
Average Common Equity $ 7,667.0 $ 7,358.2 4 %
Return on Average Common Equity 9.54 % 9.34 % 2
Return on Average Assets 0.77 % 0.74 % 4
Cash Dividends Declared per Common Share $ 1.23 $ 1.18 4 %
Average Common Shares Outstanding (000s)
Basic 239,265 240,418
Diluted 240,555 240,881
Common Shares Outstanding (EOP) (000s) 237,322 238,915
(*) Percentage calculations are based on actual balances rather than the rounded amounts presented in the Supplemental Consolidated Financial Information.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
BALANCE SHEET
($ In Millions) DECEMBER 31
2013 2012 % Change (*)
Assets
Federal Funds Sold and Securities Purchased under
Agreements to Resell $ 529.6 $ 60.8 N/M %
Interest-Bearing Deposits with Banks 19,397.4 18,803.5 3
Federal Reserve Deposits and Other Interest-Bearing 12,911.5 7,619.7 69
Securities
U.S. Government 1,917.9 1,784.6 7
Obligations of States and Political Subdivisions 229.8 343.4 (33 )
Government Sponsored Agency 17,563.8 18,751.7 (6 )
Other (**) 11,431.7 10,604.5 8
Total Securities 31,143.2 31,484.2 (1 )
Loans and Leases 29,385.5 29,504.5 -
Total Earning Assets 93,367.2 87,472.7 7
Allowance for Credit Losses Assigned to Loans and Leases (278.1 ) (297.9 ) (7 )
Cash and Due from Banks 3,162.4 3,752.7 (16 )
Buildings and Equipment 458.8 469.9 (2 )
Client Security Settlement Receivables 1,355.2 2,049.1 (34 )
Goodwill 540.7 537.8 1
Other Assets 4,341.1 3,479.5 25
Total Assets $ 102,947.3 $ 97,463.8 6 %
Liabilities and Stockholders' Equity
Interest-Bearing Deposits
Savings and Money Market $ 14,991.5 $ 15,189.7 (1 ) %
Savings Certificates and Other Time 1,874.4 2,466.1 (24 )
Non-U.S. Offices - Interest-Bearing 48,461.7 39,720.2 22
Total Interest-Bearing Deposits 65,327.6 57,376.0 14
Short-Term Borrowings 3,441.0 1,847.4 86
Senior Notes 1,996.6 2,405.8 (17 )
Long-Term Debt 1,709.2 1,421.6 20
Floating Rate Capital Debt 277.1 277.0 -
Total Interest-Related Funds 72,751.5 63,327.8 15
Demand and Other Noninterest-Bearing Deposits 18,770.5 24,031.8 (22 )
Other Liabilities 3,513.3 2,577.2 36
Total Liabilities 95,035.3 89,936.8 6
Total Equity 7,912.0 7,527.0 5
Total Liabilities and Stockholders' Equity $ 102,947.3 $ 97,463.8 6 %
(*) Percentage calculations are based on actual balances rather than the rounded amounts presented in the Supplemental Consolidated Financial Information.
(**) Other securities include Federal Reserve and Federal Home Loan Bank stock and certain community development investments for purposes of presenting earning assets; such securities are classified in other assets on the consolidated balance sheet.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
BALANCE SHEET
($ In Millions) DECEMBER 31 SEPTEMBER 30
2013 2013 % Change (*)
Assets
Federal Funds Sold and Securities Purchased under
Agreements to Resell $ 529.6 $ 534.6 (1 ) %
Interest-Bearing Deposits with Banks 19,397.4 17,383.9 12
Federal Reserve Deposits and Other Interest-Bearing 12,911.5 8,452.8 53
Securities
U.S. Government 1,917.9 1,524.5 26
Obligations of States and Political Subdivisions 229.8 263.2 (13 )
Government Sponsored Agency 17,563.8 17,066.0 3
Other (**) 11,431.7 12,123.6 (6 )
Total Securities 31,143.2 30,977.3 1
Loans and Leases 29,385.5 29,064.8 1
Total Earning Assets 93,367.2 86,413.4 8
Allowance for Credit Losses Assigned to Loans and Leases (278.1 ) (287.2 ) (3 )
Cash and Due from Banks 3,162.4 2,690.7 18
Buildings and Equipment 458.8 444.3 3
Client Security Settlement Receivables 1,355.2 1,630.2 (17 )
Goodwill 540.7 537.7 1
Other Assets 4,341.1 4,540.4 (4 )
Total Assets $ 102,947.3 $ 95,969.5 7 %
Liabilities and Stockholders' Equity
Interest-Bearing Deposits
Savings and Money Market $ 14,991.5 $ 13,802.6 9 %
Savings Certificates and Other Time 1,874.4 1,939.6 (3 )
Non-U.S. Offices - Interest-Bearing 48,461.7 45,017.2 8
Total Interest-Bearing Deposits 65,327.6 60,759.4 8
Short-Term Borrowings 3,441.0 3,327.3 3
Senior Notes 1,996.6 1,996.5 -
Long-Term Debt 1,709.2 993.5 72
Floating Rate Capital Debt 277.1 277.1 -
Total Interest-Related Funds 72,751.5 67,353.8 8
Demand and Other Noninterest-Bearing Deposits 18,770.5 17,402.3 8
Other Liabilities 3,513.3 3,396.3 3
Total Liabilities 95,035.3 88,152.4 8
Total Equity 7,912.0 7,817.1 1
Total Liabilities and Stockholders' Equity $ 102,947.3 $ 95,969.5 7 %
(*) Percentage calculations are based on actual balances rather than the rounded amounts presented in the Supplemental Consolidated Financial Information.
(**) Other securities include Federal Reserve and Federal Home Loan Bank stock and certain community development investments for purposes of presenting earning assets; such securities are classified in other assets on the consolidated balance sheet.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
AVERAGE BALANCE SHEET
($ In Millions) FOURTH QUARTER
2013 2012 % Change (*)
Assets
Federal Funds Sold and Securities Purchased under
Agreements to Resell $ 549.7 $ 239.3 130 %
Interest-Bearing Deposits with Banks 18,264.9 18,355.2 -
Federal Reserve Deposits and Other Interest-Bearing 13,220.9 4,118.7 N/M
Securities
U.S. Government 1,318.8 1,785.1 (26 )
Obligations of States and Political Subdivisions 248.2 371.8 (33 )
Government Sponsored Agency 17,574.6 19,041.4 (8 )
Other (**) 11,566.5 9,793.3 18
Total Securities 30,708.1 30,991.6 (1 )
Loans and Leases 28,858.1 29,180.8 (1 )
Total Earning Assets 91,601.7 82,885.6 11
Allowance for Credit Losses Assigned to Loans and Leases (283.8 ) (298.1 ) (5 )
Cash and Due from Banks 2,676.5 4,059.3 (34 )
Buildings and Equipment 454.2 461.2 (2 )
Client Security Settlement Receivables 813.3 624.6 30
Goodwill 537.9 536.9 -
Other Assets 3,906.9 3,401.0 15
Total Assets $ 99,706.7 $ 91,670.5 9 %
Liabilities and Stockholders' Equity
Interest-Bearing Deposits
Savings and Money Market $ 14,340.8 $ 14,023.4 2 %
Savings Certificates and Other Time 1,861.6 2,728.9 (32 )
Non-U.S. Offices - Interest-Bearing 47,920.3 37,461.3 28
Total Interest-Bearing Deposits 64,122.7 54,213.6 18
Short-Term Borrowings 4,989.9 1,614.2 N/M
Senior Notes 1,996.5 2,492.6 (20 )
Long-Term Debt 1,485.8 1,423.7 4
Floating Rate Capital Debt 277.1 277.0 -
Total Interest-Related Funds 72,872.0 60,021.1 21
Demand and Other Noninterest-Bearing Deposits 16,004.8 21,280.4 (25 )
Other Liabilities 3,054.2 2,817.0 8
Total Liabilities 91,931.0 84,118.5 9
Total Equity 7,775.7 7,552.0 3
Total Liabilities and Stockholders' Equity $ 99,706.7 $ 91,670.5 9 %
(*) Percentage calculations are based on actual balances rather than the rounded amounts presented in the Supplemental Consolidated Financial Information.
(**) Other securities include Federal Reserve and Federal Home Loan Bank stock and certain community development investments for purposes of presenting earning assets; such securities are classified in other assets on the consolidated balance sheet.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
AVERAGE BALANCE SHEET
FOURTH THIRD
($ In Millions) QUARTER QUARTER
2013 2013 % Change (*)
Assets
Federal Funds Sold and Securities Purchased under
Agreements to Resell $ 549.7 $ 548.2 - %
Interest-Bearing Deposits with Banks 18,264.9 17,767.6 3
Federal Reserve Deposits and Other Interest-Bearing 13,220.9 7,987.5 66
Securities
U.S. Government 1,318.8 1,619.2 (19 )
Obligations of States and Political Subdivisions 248.2 268.8 (8 )
Government Sponsored Agency 17,574.6 17,082.6 3
Other (**) 11,566.5 11,592.8 -
Total Securities 30,708.1 30,563.4 -
Loans and Leases 28,858.1 28,662.4 1
Total Earning Assets 91,601.7 85,529.1 7
Allowance for Credit Losses Assigned to Loans and Leases (283.8 ) (289.6 ) (2 )
Cash and Due from Banks 2,676.5 2,776.8 (4 )
Buildings and Equipment 454.2 453.0 -
Client Security Settlement Receivables 813.3 714.8 14
Goodwill 537.9 532.5 1
Other Assets 3,906.9 5,495.9 (29 )
Total Assets $ 99,706.7 $ 95,212.5 5 %
Liabilities and Stockholders' Equity
Interest-Bearing Deposits
Savings and Money Market $ 14,340.8 $ 14,286.5 - %
Savings Certificates and Other Time 1,861.6 1,969.0 (5 )
Non-U.S. Offices - Interest-Bearing 47,920.3 43,064.7 11
Total Interest-Bearing Deposits 64,122.7 59,320.2 8
Short-Term Borrowings 4,989.9 5,447.2 (8 )
Senior Notes 1,996.5 2,192.5 (9 )
Long-Term Debt 1,485.8 978.5 52
Floating Rate Capital Debt 277.1 277.1 -
Total Interest-Related Funds 72,872.0 68,215.5 7
Demand and Other Noninterest-Bearing Deposits 16,004.8 16,134.2 (1 )
Other Liabilities 3,054.2 3,165.0 (3 )
Total Liabilities 91,931.0 87,514.7 5
Total Equity 7,775.7 7,697.8 1
Total Liabilities and Stockholders' Equity $ 99,706.7 $ 95,212.5 5 %
(*) Percentage calculations are based on actual balances rather than the rounded amounts presented in the Supplemental Consolidated Financial Information.
(**) Other securities include Federal Reserve and Federal Home Loan Bank stock and certain community development investments for purposes of presenting earning assets; such securities are classified in other assets on the consolidated balance sheet.
NORTHERN TRUST CORPORATION
(Supplemental Consolidated Financial Information)
QUARTERLY TREND DATA
2013 2012
($ In Millions Except Per Share Data)
QUARTERS QUARTERS
FOURTH THIRD SECOND FIRST FOURTH
Net Income Summary
Trust, Investment and Other Servicing Fees $ 673.8 $ 648.0 $ 657.3 $ 630.7 $ 622.6
Other Noninterest Income 121.5 162.2 143.1 119.6 112.9
Net Interest Income 249.9 237.0 220.1 226.1 234.2
Total Revenue 1,045.2 1,047.2 1,020.5 976.4 969.7
Provision for Credit Losses 5.0 5.0 5.0 5.0 5.0
Noninterest Expense 794.5 740.7 729.7 728.9 741.5
Income before Income Taxes 245.7 301.5 285.8 242.5 223.2
Provision for Income Taxes 76.0 95.0 94.7 78.5 55.5
Net Income $ 169.7 $ 206.5 $ 191.1 $ 164.0 $ 167.7
Per Common Share
Net Income - Basic $ 0.70 $ 0.85 $ 0.78 $ 0.68 $ 0.69
- Diluted 0.70 0.84 0.78 0.67 0.69
Cash Dividends Declared per Common Share 0.31 0.31 0.31 0.30 0.30
Book Value (EOP) 33.34 32.71 32.17 31.82 31.51
Market Value (EOP) 61.89 54.38 57.90 54.56 50.16
Ratios
Return on Average Common Equity 8.66 % 10.64 % 10.02 % 8.82 % 8.83
%
Return on Average Assets 0.68 0.86 0.83 0.73 0.73
Net Interest Margin (GAAP) 1.08 1.10 1.06 1.12 1.12
Net Interest Margin (FTE) 1.12 1.14 1.10 1.15 1.17
Risk-based Capital Ratios
Tier 1 13.4 % 13.6 % 13.1 % 13.3 % 12.8
%
Total (Tier 1 + Tier 2) 15.8 14.9 14.4 14.7 14.3
Tier 1 Leverage 7.9 8.3 8.4 8.4 8.2
Tier 1 Common Equity (non-GAAP) 12.9 13.1 12.6 12.8 12.4
Assets Under Custody ($ In Billions) - EOP
Corporate $ 5,079.7 $ 4,766.5 $ 4,538.9 $ 4,569.1 $ 4,358.6
Wealth Management 496.0 470.5 452.6 455.3 446.3
Total Assets Under Custody $ 5,575.7 $ 5,237.0 $ 4,991.5 $ 5,024.4 $ 4,804.9
Assets Under Management ($ In Billions) - EOP $ 884.5 $ 846.2 $ 803.0 $ 810.2 $ 758.9
Asset Quality ($ In Millions) - EOP
Nonperforming Loans and Leases $ 262.8 $ 270.1 $ 266.7 $ 251.7 $ 254.8
Other Real Estate Owned (OREO) 11.9 13.9 14.5 10.5 20.3
Total Nonperforming Assets $ 274.7 $ 284.0 $ 281.2 $ 262.2 $ 275.1
Nonperforming Assets / Loans and Leases and OREO 0.93 % 0.98 % 0.98 % 0.91 % 0.93
%
Gross Charge-offs $ 19.5 $ 11.6 $ 15.6 $ 12.6 $ 16.1
Less: Gross Recoveries 4.9 3.3 7.5 3.9 10.7
Net Charge-offs $ 14.6 $ 8.3 $ 8.1 $ 8.7 $ 5.4
Net Charge-offs (Annualized) to Average Loans and Leases 0.20 % 0.12 % 0.11 % 0.12 % 0.07
%
Allowance for Credit Losses Assigned to Loans and Leases $ 278.1 $ 287.2 $ 290.4 $ 294.1 $ 297.9
Allowance to Nonperforming Loans and Leases 1.1x 1.1x 1.1x 1.2x 1.2x
Allowance for Other Credit-Related Exposures $ 29.8 $ 30.3 $ 30.3 $ 29.7 $ 29.7
Contact:
Northern Trust Corporation
Investor Contact:
Bev Fleming, (312) 444-7811
Beverly_Fleming@ntrs.com
or
Media Contact:
Doug Holt, (312) 557-1571
Doug_Holt@ntrs.com
http://www.northerntrust.com
Shelby American Commemorates 50th Anniversary FIA Cobra with Special Edition Car
Iconic Shelby FIA Cobra to be Celebrated
Business Wire Shelby American, Inc.
January 17, 2014 1:03 PM
Shelby American Commemorates 50th Anniversary FIA Cobra with Special Edition Car.
View photo
To celebrate the birth of the 289 Ford powered roadsters, Shelby American will offer 50 limited edition …
SCOTTSDALE, Ariz.--(BUSINESS WIRE)--
In 1964, Shelby American, today a wholly owned subsidiary of Carroll Shelby International Inc. (CSBI:PK) introduced the FIA version of the small block Cobra, which competed in the 1964 World Manufacturers Championship series against marques like Aston Martin, Jaguar and Corvette. To celebrate the birth of the 289 Ford powered roadsters, Shelby American will offer 50 limited edition continuation (CSX7000) Shelby 289 FIA Cobras. Each will be painted “Viking Blue” with FIA stripes and roundels, feature a black FIA interior, special billet anniversary badges, original style wheels and a variety of additional options. The 50th Anniversary FIA Shelby Cobra will be introduced at the annual Barrett-Jackson Auction in Scottsdale, Ariz, on Friday, Jan. 17, 2014.
“The 289 FIA Shelby Cobras were among the most important cars in American racing history,” said John Luft, president of Shelby American. “The FIA Cobras built during that period were piloted by racing legends including Ken Miles, Dan Gurney, Phil Hill and Bob Bondurant. Thus, some of the most revered drivers in the sport put the 289 FIA Cobra into the winner’s circle. Combining a robust, powerful American engine with a lightweight chassis was sheer brilliance. Shelby’s formula still resonates today and is followed by automakers worldwide.”
Shelby American built the 289 FIA Cobras for racing; modifications included a new dash, widened front and rear fenders, cut-back doors, new dampers, racing wheels featuring the pin-drive hub, oil cooler scoops and a competition spec 289 small block engine.
Today, the CSX7000 Continuation Shelby Cobra 289 FIA’s are component vehicles that can be fitted with a proper drive train by a customer or automotive professional. Each car is built to order and delivered as a rolling chassis, less drive train, with a Shelby American issued MSO.
“Our CSX7000 cars incorporate safety and performance improvements, without sacrificing driving excitement or originality,” added Vince LaViolette, senior designer and head of R&D at Shelby American. “With a small block V8 pushing only 2,100 lbs., it’s the lightest Cobra ever built with an incredible power-to-weight ratio. This allows the small block Cobra to dive deep into corners and pull through with incredible precision and accuracy.”
The Continuation Shelby Cobra 289 FIA vehicles retain everything from the authentic style suspension to the graceful body lines, but are upgraded to contemporary standards. Shelby American uses modern disc brakes, a stronger frame and the bodies are available in either aluminum or fiberglass. The 50th Anniversary Edition also features a complete exhaust for a small block Ford V8, a special fitted car cover and optional detachable steering wheel.
“The importance and historical significance of these cars was the fact that they brought a small shop in Southern California to the forefront of international racing on two continents within the same year,” said Shelby Expert and SAAC Member Jeff Gagnon. “Shelby American took it to Ferrari, Corvette and other well-supplied, well-funded and established race teams and manufacturers. That was no small feat, even in those simpler times.”
The 50th Anniversary CSX7000 FIA Continuation Cobra will begin at $94,995 for a fiberglass or $159,995 for an aluminum bodied car, excluding drive train. Each will be documented in our ‘World Registry’ by Shelby American. Cobras can be purchased through a network of Shelby American Cobra dealers. Information about options and availability can be found at http://www.shelbyamerican.com/50fia.asp.
About Shelby American, Inc. and Carroll Shelby Licensing
Founded by legend Carroll Shelby, Shelby American manufactures and markets performance vehicles and related products. The company builds authentic continuation Cobras, including the 427 S/C, 289 FIA and 289 street car component vehicles; it offers the Shelby GT, 1000, GT350, GT500 Super Snake and GTS post-title packages for the 2005-2014 Ford Mustang. Shelby American also builds the Shelby Raptor muscle truck and Shelby Focus ST hot hatch. For more information, visit www.shelbyamerican.com. Shelby American is a subsidiary of Carroll Shelby International Inc. (CSBI.PK). Carroll Shelby Licensing Inc., also a wholly owned division, is the exclusive holder of Carroll Shelby's trademarks and vehicle design rights. It also holds trademark rights for Shelby-branded apparel, accessories and collectibles. Info is at www.shelbylicensing.com.
Photos/Multimedia Gallery Available: http://www.businesswire.com/multimedia/home/20140117005705/en/
MULTIMEDIA AVAILABLE:http://www.businesswire.com/cgi-bin/mmg.cgi?eid=50785926&lang=en
Contact:
TPRM
Scott Black, 214-520-3430
sblack@tprm.com
Travelzoo Reports Fourth Quarter 2013 Results and Announces Share Repurchase Program
Business Wire Travelzoo Inc.
59 minutes ago
NEW YORK--(BUSINESS WIRE)--
Travelzoo Inc. (TZOO):
Fourth Quarter 2013 Financial Highlights:
Revenue of $37.5 million, up 1% year-over-year
Operating income of $4.5 million, up 3% year-over-year
Net income of $3.2 million
Earnings per share of $0.21, compared to $0.24 in the prior-year period
Cash used in operations was $1.8 million
Travelzoo Inc., a global Internet media company, today announced financial results for the fourth quarter ended December 31, 2013, with revenue of $37.5 million, an increase of 1% year-over-year. Operating income was $4.5 million, up 3% year-over-year. Net income was $3.2 million, with earnings per share of $0.21, down from $0.24 in the prior-year period.
Travelzoo also announced that its board of directors has authorized the repurchase of up to 500,000 of the company's outstanding common shares. Purchases may be made, from time to time, in the open market and will be funded from available cash. The number of shares to be purchased and the timing of purchases will be based on the level of Travelzoo's cash balances, general business and market conditions, and other factors, including alternative investment opportunities.
"Our Travel products showed continued strength in Q4, particularly in Europe, which contributed 40% of the company's profits. These gains were offset by revenue declines in SuperSearch and Fly.com," said Chris Loughlin, chief executive officer. "We will continue to invest in audience and products to spur future growth. These include our hotel booking platform, which is now in internal testing, as well as features that make it easier for our users to find deals when and where they need them, particularly on their mobile devices."
For the full year, revenue was $158.2 million, an increase of 5% year-over-year. GAAP operating income was $2.3 million, down 91% year-over-year. Non-GAAP operating income was $24.3 million, down 15% year-over-year. GAAP net loss was $5.0 million, with loss per share of $0.33, compared to earnings per share of $1.14 in the prior-year period. Non-GAAP net income was $17.0 million, with earnings per share of $1.11, down from $1.33 in the prior-year period. For the year ended December 31, 2013 and 2012, non-GAAP operating income, non-GAAP net income and non-GAAP earnings per share exclude a $22.0 million and a $3.0 million charge related to a reserve for Travelzoo Inc.'s settlement agreements in connection with a dispute over unclaimed property audits.
North America
North America business segment revenue decreased 3% year-over-year to $25.6 million. Operating profit for the fourth quarter was $2.7 million, or 10% of revenue, down from $3.4 million, or 13% of revenue, in the prior-year period.
Europe
Europe business segment revenue increased 12% year-over-year to $11.9 million. In local currency terms, revenue increased 11% year-over-year. Operating profit for the fourth quarter was $1.8 million, or 15% of revenue, up from $1.0 million, or 9% of revenue in the prior-year period.
Search Products
In response to declining revenue and profit from its Search products, which include SuperSearch and Fly.com, the Company has initiated a performance review, which may result in merging the products, discontinuing or replacing one or both of them. "Challenges in traffic acquisition from search engines and poor monetization on mobile devices have led to continued declines in Search revenue," said Glen Ceremony, chief financial officer. "As we are reviewing these products and working on their improvement, we will also put a stronger focus on profitability, which could result in a revenue decline of approximately $1.5 million from SuperSearch versus the prior-year period."
Subscribers
Travelzoo had a total unduplicated number of subscribers in North America and Europe of 23.3 million as of December 31, 2013, up 4% from December 31, 2012. In North America, total unduplicated number of subscribers was 16.6 million as of December 31, 2013, up 3% from December 31, 2012. In Europe, total unduplicated number of subscribers was 6.8 million as of December 31, 2013, up 6% from December 31, 2012.
Income Taxes
Income tax expense was $1.3 million, compared to $692,000 in the prior-year period. The effective income tax rate was 29%, up from 16% in the prior-year period.
Asset Management
During the fourth quarter of 2013, Travelzoo used $1.8 million of cash from operating activities. Accounts receivable increased by $360,000 over the prior-year period to $14.0 million. Accounts payable increased by $3.1 million over the prior-year period to $31.8 million. Capital expenditures were $1.9 million, up from $698,000 in the prior-year period. As of December 31, 2013, cash and cash equivalents were $66.2 million.
Non-GAAP Measures
To give an enhanced view of Travelzoo's operating performance, management has calculated non-GAAP operating expense, non-GAAP operating income, non-GAAP operating margin, non-GAAP effective tax rate, non-GAAP net income and non-GAAP earnings per share by excluding the charges related to our unexchanged promotional shares. The company believes these metrics assist investors to assess certain business trends in the same way that these trends are analyzed by management. The discussion of these non-GAAP metrics are not in accordance with GAAP and may differ from non-GAAP methods of accounting and reporting used by other companies. Non-GAAP metrics are merely a supplement to, and not a replacement for, GAAP financial measures. As the only difference between GAAP and non-GAAP measures is the charges related to our unexchanged promotional shares, today’s reporting should not be viewed as Travelzoo’s intention to report non-GAAP measures in future periods. Refer to the “Reconciliation of GAAP to Non-GAAP Measures” section of this press release for a summary of these non-GAAP measures and their reconciliation to the reported GAAP measures.
Conference Call
Travelzoo will host a conference call to discuss fourth quarter results at 11:00 a.m. ET today. Please visit http://www.travelzoo.com/earnings to
download the management presentation (PDF format) to be discussed in the conference call;
access the webcast.
About Travelzoo
Travelzoo Inc. is a global Internet media company. With more than 26 million subscribers in North America, Europe, and Asia Pacific and 25 offices worldwide, Travelzoo® publishes deals from more than 2,000 travel and entertainment companies. Travelzoo’s deal experts review offers to find the best deals and confirm their true value. In Asia Pacific, Travelzoo is independently owned and operated by Travelzoo (Asia) Ltd. and Travelzoo Japan K.K. under a license agreement with Travelzoo Inc.
Certain statements contained in this press release that are not historical facts may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. These forward-looking statements may include, but are not limited to, statements about our plans, objectives, expectations, prospects and intentions, markets in which we participate and other statements contained in this press release that are not historical facts. When used in this press release, the words “expect,” “predict,” “project,” “anticipate,” “believe,” “estimate,” “intend,” “plan,” “seek” and similar expressions are generally intended to identify forward-looking statements. Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements, including changes in our plans, objectives, expectations, prospects and intentions, and other factors discussed in our filings with the SEC. We cannot guarantee any future levels of activity, performance or achievements. Travelzoo undertakes no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this press release. Travelzoo and Top 20 are registered trademarks of Travelzoo Inc. All other company and product names mentioned are trademarks of their respective owners.
Travelzoo Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
Three months ended Twelve months ended
December 31, December 31,
2013 2012 2013 2012
Revenues $ 37,475 $ 37,028 $ 158,234 $ 151,168
Cost of revenues 4,670 4,073 17,402 15,745
Gross profit 32,805 32,955 140,832 135,423
Operating expenses:
Sales and marketing 17,307 18,489 74,870 68,242
General and administrative 11,025 10,109 41,684 38,692
Unexchanged promotional shares — — 22,000 3,000
Total operating expenses 28,332 28,598 138,554 109,934
Income from operations 4,473 4,357 2,278 25,489
Other income 61 92 429 309
Income before income taxes 4,534 4,449 2,707 25,798
Income taxes 1,304 692 7,718 7,600
Net income (loss) $ 3,230 $ 3,757 $ (5,011 ) $ 18,198
Net income (loss) per share:
Basic $ 0.22 $ 0.24 $ (0.33 ) $ 1.15
Diluted $ 0.21 $ 0.24 $ (0.33 ) $ 1.14
Weighted Average Shares:
Basic 14,997 15,659 15,269 15,866
Diluted 15,072 15,659 15,269 15,901
Travelzoo Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
December 31,
2013
December 31,
2012
Assets
Current assets:
Cash and cash equivalents $ 66,223 $ 61,169
Accounts receivable, net 13,986 13,626
Income taxes receivable 2,656 6,682
Deposits 396 389
Prepaid expenses and other current assets 3,202 2,260
Deferred tax assets 1,143 2,194
Restricted cash 200 —
Funds held for reverse/forward stock split 13,668 —
Total current assets 101,474 86,320
Deposits, less current portion 1,168 1,107
Deferred tax assets, less current portion 2,032 1,710
Restricted cash 1,479 3,396
Property and equipment, net 8,245 4,314
Intangible assets, net 404 986
Total assets $ 114,802 $ 97,833
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $ 31,766 $ 28,695
Accrued expenses 10,543 8,993
Deferred revenue 1,578 2,698
Deferred rent 281 280
Reserve for unexchanged promotional shares 12,726 3,000
Payable to shareholders for reverse/forward stock split 13,668 —
Total current liabilities 70,562 43,666
Long-term tax liabilities 10,436 10,030
Deferred rent, less current portion 2,469 798
Total liabilities 83,467 54,494
Common stock 163 163
Treasury stock (15,662 ) (7,898 )
Additional paid-in capital 10,247 8,863
Accumulated other comprehensive loss (530 ) (737 )
Retained earnings 37,117 42,948
Total stockholders’ equity 31,335 43,339
Total liabilities and stockholders’ equity $ 114,802 $ 97,833
Travelzoo Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
Three months ended Twelve months ended
December 31, December 31,
2013 2012 2013 2012
Cash flows from operating activities:
Net income (loss) $ 3,230 $ 3,757 $ (5,011 ) $ 18,198
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization 795 683 2,980 2,539
Deferred income taxes 65 (2,174 ) 706 (2,178 )
Stock-based compensation 395 307 1,384 1,207
Provision for losses on accounts receivable 15 46 (29 ) 162
Net foreign currency effects (5 ) 1 33 (4 )
Changes in operating assets and liabilities:
Accounts receivable 932 1,784 (173 ) (285 )
Deposits (67 ) (24 ) (50 ) (406 )
Income tax receivable 1,873 3,351 4,042 5,171
Prepaid expenses and other current assets 290 328 (685 ) 87
Accounts payable 3,494 5,211 2,453 6,403
Accrued expenses 475 (630 ) 1,515 2,568
Deferred revenue (165 ) 190 (1,121 ) 513
Deferred rent 383 25 682 45
Income tax payable (1,298 ) (1 ) (6 ) (285 )
Reserve for unexchanged promotional shares (12,274 ) — 9,726 3,000
Other non-current liabilities 47 156 406 (35 )
Net cash provided by (used in) operating activities (1,815 ) 13,010 16,852 36,700
Cash flows from investing activities:
Purchases of intangible asset — (677 ) — (677 )
Release (purchases) of restricted cash — (272 ) 1,786 (272 )
Purchases of property and equipment (1,866 ) (698 ) (5,461 ) (2,744 )
Net cash used in investing activities (1,866 ) (1,647 ) (3,675 ) (3,693 )
Cash flows from financing activities:
Repurchase of common stock (7,764 ) (7,898 ) (7,764 ) (11,509 )
Reverse/forward stock split, including transaction costs (688 ) — (688 ) —
Net cash used in financing activities (8,452 ) (7,898 ) (8,452 ) (11,509 )
Effect of exchange rate on cash and cash equivalents 456 70 329 927
Net increase (decrease) in cash and cash equivalents (11,677 ) 3,535 5,054 22,425
Cash and cash equivalents at beginning of period 77,900 57,634 61,169 38,744
Cash and cash equivalents at end of period $ 66,223 $ 61,169 $ 66,223 $ 61,169
Supplemental disclosure of cash flow information:
Cash paid (received) for income taxes, net $ 562 $ (631 ) $ 2,479 $ 4,937
Travelzoo Inc.
Segment Information
(Unaudited)
(In thousands)
Three months ended December 31, 2013
North
America
Europe
Elimination
and Other
Consolidated
Revenue from unaffiliated customers $ 25,586 $ 11,889 $ — $ 37,475
Intersegment revenue 194 11 (205 ) —
Total net revenues 25,780 11,900 (205 ) 37,475
Operating income $ 2,680 $ 1,793 $ — $ 4,473
Three months ended December 31, 2012
North
America
Europe
Elimination
and Other
Consolidated
Revenue from unaffiliated customers $ 26,373 $ 10,655 $ — $ 37,028
Intersegment revenue 157 102 (259 ) —
Total net revenues 26,530 10,757 (259 ) 37,028
Operating income $ 3,387 $ 970 $ — $ 4,357
Twelve months ended December 31, 2013
North
America
Europe
Elimination
and Other (a)
Consolidated
Revenue from unaffiliated customers $ 111,955 $ 46,279 $ — $ 158,234
Intersegment revenue 814 452 (1,266 ) —
Total net revenues 112,769 46,731 (1,266 ) 158,234
Operating income $ 16,568 $ 7,710 $ (22,000 ) $ 2,278
Twelve months ended December 31, 2012
North
America
Europe
Elimination
and Other (a)
Consolidated
Revenue from unaffiliated customers $ 108,787 $ 42,381 $ — $ 151,168
Intersegment revenue 728 143 (871 ) —
Total net revenues 109,515 42,524 (871 ) 151,168
Operating income $ 21,481 $ 7,008 $ (3,000 ) $ 25,489
(a) Includes a charge of $22.0 million and $3.0 million for the twelve months ended December 31, 2013 and 2012, respectively, related to settlement agreements in connection with a dispute over unclaimed property audits.
Travelzoo Inc.
Reconciliation of GAAP to Non-GAAP Measures
(Unaudited)
(In thousands, except per share amounts)
Twelve months ended
December 31,
2013 2012
GAAP operating expense $ 138,554 $ 109,934
Unexchanged promotional shares (a) 22,000 3,000
Non-GAAP operating expense $ 116,554 $ 106,934
GAAP operating income $ 2,278 $ 25,489
Unexchanged promotional shares (a) 22,000 3,000
Non-GAAP operating income $ 24,278 $ 28,489
GAAP operating margin 1.4 % 16.9 %
Unexchanged promotional shares (a) 13.9 % 2.0 %
Non-GAAP operating margin 15.3 % 18.9 %
GAAP effective tax rate 285.1 % 29.5 %
Unexchanged promotional shares (a) (253.9 )% (3.1
)%
Non-GAAP effective tax rate 31.2 % 26.4 %
GAAP net income (loss) $ (5,011 ) $ 18,198
Unexchanged promotional shares (a) 22,000 3,000
Non-GAAP net income $ 16,989 $ 21,198
Earnings (loss) per share $ (0.33 ) $ 1.14
Unexchanged promotional shares (a) 1.44 0.19
Non-GAAP earnings per share (b) $ 1.11 $ 1.33
(a) Includes a charge of $22.0 million and a charge of $3.0 million for the twelve months ended December 31, 2013 and 2012, respectively, related to settlement agreements in connection with a dispute over unclaimed property audits.
(b) Shares used to calculate non-GAAP earnings per share for the twelve months ended December 31, 2013 were 15,355,160, which were different than the shares used in GAAP loss per share calculation due to the anti-dilutive effect on the GAAP loss per share.
Contact:
Media:
Travelzoo Inc.
Glen Ceremony, 212-484-4998
Chief Financial Officer
pr@travelzoo.com
Another Netflix Inc.NFLX +1.53% quarterly report, another big stock move.
Shares spiked Wednesday after the bell after Netflix reported quarterly results that exceeded analysts’ expectations, upbeat subscriber figures and an optimistic outlook.
The stock jumped 18% to $392 in after-hours trading. If the gains hold, Netflix is poised to open Thursday at a fresh record high.
Netflix reported a fourth-quarter profit of $48.4 million, or 79 cents a share, up from $7.9 million, or 13 cents a share, in the year earlier period. Revenue jumped 24% to $1.18 billion.
Analysts polled by Thomson Reuters anticipated Netflix earned 66 cents a share in the fourth quarter, on revenue of $1.17 billion.
Netflix reported 2.33 million domestic subscribers were added in the fourth quarter. Its projecting another 2.25 million U.S. streaming subscribers were added in the current quarter, which would bring its total to 34.3 million paying domestic subscribers.
Internationally, Netflix added about 1.7 million subscribers in the latest quarter, and sees 1.6 million net additions in the current quarter. It ended the fourth quarter with more than 9.7 million paid members abroad, slightly better than forecast.
The better-than-expected results and the surging stock price come after shares surged 298% last year and peaked at $389.16, making Netflix the top performer in the S&P 500 and the Nasdaq 100. Booming subscriber growth and an increase in original programming were key drivers of the stock’s move back above $300.
As we reported earlier Wednesday, Netflix’s stock historically is volatile after it reports earnings. Since 2002 when Netflix went public, its shares have had the most volatile reaction to quarterly results, on average, compared to any other stock in the S&P 1500 (a bigger index than the more widely followed S&P 500), according to data compiled by Bespoke Investment Group.
Netflix averages a 14.4% swing following its quarterly results. By comparison, stocks on average swing 5% after quarterly results are released. Stocks in the S&P 500 technology sector — which are the most volatile of the 10 large-cap sectors — average a 6.7% swing after earnings.
Another Netflix Inc.NFLX +1.53% quarterly report, another big stock move.
Shares spiked Wednesday after the bell after Netflix reported quarterly results that exceeded analysts’ expectations, upbeat subscriber figures and an optimistic outlook.
The stock jumped 18% to $392 in after-hours trading. If the gains hold, Netflix is poised to open Thursday at a fresh record high.
Netflix reported a fourth-quarter profit of $48.4 million, or 79 cents a share, up from $7.9 million, or 13 cents a share, in the year earlier period. Revenue jumped 24% to $1.18 billion.
Analysts polled by Thomson Reuters anticipated Netflix earned 66 cents a share in the fourth quarter, on revenue of $1.17 billion.
Netflix reported 2.33 million domestic subscribers were added in the fourth quarter. Its projecting another 2.25 million U.S. streaming subscribers were added in the current quarter, which would bring its total to 34.3 million paying domestic subscribers.
Internationally, Netflix added about 1.7 million subscribers in the latest quarter, and sees 1.6 million net additions in the current quarter. It ended the fourth quarter with more than 9.7 million paid members abroad, slightly better than forecast.
The better-than-expected results and the surging stock price come after shares surged 298% last year and peaked at $389.16, making Netflix the top performer in the S&P 500 and the Nasdaq 100. Booming subscriber growth and an increase in original programming were key drivers of the stock’s move back above $300.
As we reported earlier Wednesday, Netflix’s stock historically is volatile after it reports earnings. Since 2002 when Netflix went public, its shares have had the most volatile reaction to quarterly results, on average, compared to any other stock in the S&P 1500 (a bigger index than the more widely followed S&P 500), according to data compiled by Bespoke Investment Group.
Netflix averages a 14.4% swing following its quarterly results. By comparison, stocks on average swing 5% after quarterly results are released. Stocks in the S&P 500 technology sector — which are the most volatile of the 10 large-cap sectors — average a 6.7% swing after earnings.
The "Street" has TZOO coming in at .20 for the 4th quarter that should be reported on January 23, 2014! All post's welcome! The "Good Dr's In"!
WisdomTree Schedules Earnings Conference Call for Q4 on January 31, 2014 at 9:00 a.m. ET
GlobeNewswire WisdomTree Investments, Inc.
January 21, 2014 9:00 AM
NEW YORK, Jan. 21, 2014 (GLOBE NEWSWIRE) -- WisdomTree Investments, Inc. (WETF), an exchange-traded fund ("ETF") sponsor and asset manager, announced today that it plans to release its fourth quarter results on January 31, 2014 at 7:00 a.m. ET. A conference call to discuss the firm's results will be held at 9:00 a.m. ET.
Teleconference and Webcast Details
The call and accompanying presentation will be accessible as a webcast on the Investor Relations section of WisdomTree's web site at http://ir.wisdomtree.com/. A replay will be available on the web site shortly after the call.
Those wishing to listen to the live conference via telephone should dial-in at least 10 minutes before the call begins at the following telephone numbers:
Live Dial-in Information:
United States: (877) 303-7209
International: (970) 315-0420
About WisdomTree
WisdomTree Investments, Inc. is a New York-based exchange-traded fund ("ETF") sponsor and asset manager. WisdomTree currently offers 61 ETFs across Equities, Fixed Income, Currency Income and Alternatives asset classes. WisdomTree also licenses its indexes to third parties for proprietary products and promotes the use of WisdomTree ETFs in 401(k) plans. WisdomTree currently has approximately $35.0 billion in ETF assets under management. For more information, please visit www.wisdomtree.com.
WisdomTree(R) is the marketing name for WisdomTree Investments, Inc. and its wholly owned subsidiary WisdomTree Asset Management, Inc. WisdomTree Asset Management, Inc. is a registered investment advisor and is the investment advisor to the WisdomTree Trust and the WisdomTree ETFs. The WisdomTree Trust is a registered open-end investment company. Each WisdomTree ETF is a series of the WisdomTree Trust.
Contact:
WisdomTree Investments, Inc.
Stuart Bell / Jessica Zaloom
+1.917.267.3702 / +1.917.267.3735
sbell@wisdomtree.com / jzaloom@wisdomtree.com
Netflix Releases Fourth-Quarter 2013 Financial Results
PR Newswire Netflix, Inc.
48 minutes ago
LOS GATOS, Calif., Jan. 22, 2014 /PRNewswire/ -- Netflix, Inc. (NFLX) has released its fourth-quarter 2013 financial results by posting them to its website. Please visit the Netflix investor relations website at http://ir.netflix.com to view the Q4'13 financial results and letter to shareholders.
(Logo: http://photos.prnewswire.com/prnh/20101014/SF81638LOGO)
Netflix Chief Executive Officer Reed Hastings, Chief Financial Officer David Wells and Chief Content Officer Ted Sarandos will participate in a live video interview at 2 p.m. Pacific Time at youtube.com/netflixir. The interview will be conducted by Rich Greenfield of BTIG Research and Doug Anmuth of JP Morgan. Questions that investors would like to see asked should be sent to rgreenfield@btig.com or douglas.anmuth@jpmorgan.com .
About Netflix, Inc.
Netflix is the world's leading Internet television network with over 44 million members in 41 countries enjoying more than one billion hours of TV shows and movies per month, including original series. For one low monthly price, Netflix members can watch as much as they want, anytime, anywhere, on nearly any Internet-connected screen. Members can play, pause and resume watching, all without commercials or commitments. Learn more about how Netflix (NFLX) is pioneering Internet television at www.netflix.com or follow Netflix on Facebook and Twitter.
Northern Trust Corporation to Webcast Fourth Quarter 2013 Earnings Conference Call
Business Wire Northern Trust Corporation
January 2, 2014 1:39 PM
CHICAGO--(BUSINESS WIRE)--
Northern Trust Corporation announced today that it will webcast its fourth quarter 2013 earnings conference call live on Wednesday, January 22, 2014. The webcast will be accessible on Northern Trust’s web site: www.northerntrust.com/financialreleases.
The call will be conducted at 11 a.m. CT, following the release that morning of Northern Trust’s fourth quarter 2013 earnings press release. A replay of the webcast will be available for approximately four weeks after the date of the call.
Participants will need Windows Media or Adobe Flash software, which may be downloaded for free at Northern Trust’s web site. Northern Trust’s fourth quarter 2013 earnings press release and presentation materials referred to on the conference call also will be made available at the above web address.
About Northern Trust
Northern Trust Corporation (NTRS) is a leading provider of investment management, asset and fund administration, banking solutions and fiduciary services for corporations, institutions and affluent individuals worldwide. Northern Trust, a financial holding company based in Chicago, has offices in 18 U.S. states and 18 international locations in North America, Europe, the Middle East and the Asia-Pacific region. As of September 30, 2013, Northern Trust had assets under custody of US$5.2 trillion, and assets under investment management of US$846 billion. For more than 120 years, Northern Trust has earned distinction as an industry leader in combining exceptional service and expertise with innovative products and technology. For more information, visit www.northerntrust.com or follow us on Twitter @NorthernTrust.
Contact:
Northern Trust Corporation
Investor Contact:
Bev Fleming, (312) 444-7811
Beverly_Fleming@ntrs.com
or
Media Contact:
Doug Holt, (312) 557-1571
Doug_Holt@ntrs.com
http://www.northerntrust.com
Tupperware Brands Corporation Announces Fourth Quarter 2013 Earnings Conference Call Webcast
GlobeNewswire Tupperware Brands Corporation
December 17, 2013 2:00 PM
ORLANDO, Fla., Dec. 17, 2013 (GLOBE NEWSWIRE) -- Tupperware Brands Corporation (TUP) will release its fourth quarter 2013 earnings results on Wednesday, January 29, 2014, prior to the opening of the market, followed by its earnings release conference call at 8:30 a.m. Eastern Time (7:30 a.m. Central Time). To participate in the call, dial 678-905-9434, Code: 26439539.
This call is being webcast by NASDAQ OMX and can be accessed at www.tupperwarebrands.com.
The webcast is also being distributed through third party distribution channels, including the StreetEvents Network operated by Thomson Reuters (Markets) LLC and its affiliates.
Tupperware Brands Corporation is a portfolio of global direct selling companies, selling innovative, premium products across multiple brands and categories through an independent sales force of 2.8 million. Product brands and categories include design-centric preparation, storage and serving solutions for the kitchen and home through the Tupperware brand and beauty and personal care products for consumers through the Armand Dupree, Avroy Shlain, BeautiControl, Fuller Cosmetics, NaturCare, Nutrimetics and Nuvo brands.
Contact:
Media Contact
Teresa Burchfield
TeresaBurchfield@tupperware.com
407-826-4475
Newell Rubbermaid to Webcast Fourth Quarter 2013 Earnings Results
GlobeNewswire Newell Rubbermaid
12 hours ago
ATLANTA, Jan. 21, 2014 (GLOBE NEWSWIRE) -- Newell Rubbermaid (NWL) today announced its fourth quarter 2013 earnings results will be released Friday, January 31, prior to market open and will be followed by a live webcast at 9:00 a.m. ET. To listen to the webcast, please visit Events & Presentations in the Investor Relations section of Newell Rubbermaid's Web site at www.newellrubbermaid.com. The live webcast will be recorded and made available for replay.
About Newell Rubbermaid
Newell Rubbermaid Inc., an S&P 500 company, is a global marketer of consumer and commercial products with 2012 sales of approximately $5.6 billion and a strong portfolio of leading brands, including Sharpie(R), Paper Mate(R), Rubbermaid Commercial Products(R), Irwin(R), Lenox(R), Parker(R), Waterman(R), Rubbermaid(R), Levolor(R), Calphalon(R), Goody(R), Graco(R), Aprica(R) and Dymo(R). As part of the company's Growth Game Plan, Newell Rubbermaid is making sharper portfolio choices and investing in new marketing and innovation to accelerate performance.
This press release and additional information about Newell Rubbermaid are available on the company's Web site, www.newellrubbermaid.com.
Contact:
Nancy O'Donnell
Vice President, Investor Relations
+1 (770) 418-7723
David Doolittle
Vice President, Global Communications
+1 (770) 418-7519
Lithia Schedules Release of Fourth Quarter and Full Year 2013 Results
Marketwired Lithia Motors
January 16, 2014 7:14 AM
MEDFORD, OR--(Marketwired - Jan 16, 2014) - Lithia Motors, Inc. (NYSE: LAD) announced its fourth quarter and full year 2013 earnings will be released before the market opens on Wednesday, February 19, 2014. A conference call to discuss the earnings results is scheduled for the same day at 10:00 a.m. Eastern Time.
How to Participate
The conference call may be accessed by telephone at (877) 407-8029. To listen live on our website or for replay, visit www.lithiainvestorrelations.com and click on webcasts.
About Lithia
Lithia Motors, Inc. is the ninth largest automotive retailer in the United States. Lithia sells 28 brands of new vehicles and all brands of used vehicles at 94 stores in 11 states. Lithia also arranges finance, warranty, and credit insurance contracts; and provides vehicle parts, maintenance, and repair services at all of its locations.
Sites
www.lithia.com
www.lithiacareers.com
www.assuredservice.com
Lithia Motors on Facebook
http://www.facebook.com/LithiaMotors
Lithia Motors on Twitter
http://twitter.com/lithiamotors
Contact:
John North
VP Finance and Controller
(541) 618-5748
Travelzoo Q4 2013 Earnings Conference Call Thursday, January 23 at 11:00 AM ET
Business Wire Travelzoo Inc.
4 hours ago
NEW YORK--(BUSINESS WIRE)--
Travelzoo Inc. (TZOO):
WHAT: Travelzoo Inc. will host a conference call to discuss the Company’s financial results for the fourth quarter ended December 31, 2013. Travelzoo Inc. will issue a press release reporting its results before the market opens on January 23, 2014.
WHEN: Thursday, January 23, 2014 at 11:00 AM ET
HOW:
A live webcast of Travelzoo’s Q4 2013 earnings conference call can be accessed at http://ir.travelzoo.com/earnings.cfm. The webcast will be archived within 24 hours of the end of the call and will be available through the same link.
CONTACT: Investor Relations
Glen Ceremony, CFO, Travelzoo Inc.
gceremony@travelzoo.com
About Travelzoo
Travelzoo Inc. is a global Internet media company. With more than 26 million subscribers in North America, Europe, and Asia Pacific and 25 offices worldwide, Travelzoo® publishes deals from more than 2,000 travel, entertainment and local companies. Travelzoo Deal Experts review offers to find the best deals and confirm their true value. In Asia Pacific, Travelzoo is independently owned and operated by Travelzoo (Asia) Ltd. and Travelzoo Japan K.K. under a license agreement with Travelzoo Inc.
Certain statements contained in this press release that are not historical facts may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. These forward-looking statements may include, but are not limited to, statements about our plans, objectives, expectations, prospects and intentions, markets in which we participate and other statements contained in this press release that are not historical facts. When used in this press release, the words “expect”, “predict”, “project”, “anticipate”, “believe”, “estimate”, “intend”, “plan”, “seek” and similar expressions are generally intended to identify forward-looking statements. Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements, including changes in our plans, objectives, expectations, prospects and intentions and other factors discussed in our filings with the SEC. We cannot guarantee any future levels of activity, performance or achievements. Travelzoo undertakes no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this press release. Travelzoo and Top 20 are registered trademarks of Travelzoo. All other names are trademarks and/or registered trademarks of their respective owners.
Contact:
Media:
Travelzoo
Karyn Ravin, 212-829-0150 x1
pr@travelzoo.com
AZZ incorporated Board Declares Quarterly Cash Dividend and Issues Revenue and Earnings Guidance for Fiscal Year 2015
PR Newswire AZZ incorporated
8 hours ago
FORT WORTH, Texas, Jan. 17, 2014 /PRNewswire/ -- AZZ incorporated (AZZ), a global provider of electrical products and services and a provider of galvanizing services, today announced the Board of Directors, at its regularly scheduled meeting, has declared a quarterly cash dividend of 14 cents per share payable on February 14, 2014 to shareholders of record on January 31, 2014.
The Company is issuing revenue and earnings guidance for fiscal year 2015. Fiscal Year 2015 refers to the 12 month period beginning March 1, 2014 and ending on February 28, 2015.
Tom E. Ferguson, president and chief executive officer of AZZ incorporated, stated, "Based upon the evaluation of information currently available to management, we are projecting our fiscal 2015 earnings to be within the range of $2.40 and $2.80 per diluted share, and revenues are estimated to be within the range of $850 to $900 million. We continue to build upon the success we have been able to achieve over the past decade, and continually strive to further enhance the performance of the Company. Revenues for the Electrical and Industrial Products and Services Segment are projected to increase as a result of organic growth and the full year impact of WSI operating results. Margins in the Electrical and Industrial Products and Services Segment should be in the range of 11 to 13 percent. The Galvanizing Services Segment revenues are projected to be up due primarily to market share improvement. Margins for the Galvanizing Services Segment should remain strong, and should be in the range of 26 to 28 percent. It is anticipated that 41 percent of our revenues will be derived from the Galvanizing Services Segment and 59 percent from the Electrical and Industrial Products and Services Segment. Further information is provided in our Form 8-K to be filed on January 17, 2014."
Mr. Ferguson continued, "Our next, regularly scheduled quarterly conference call will be April 2014, where we will be reporting the operating results for our fourth quarter and 2014 fiscal year and a discussion of our fiscal year 2015 guidance. We are continuing our efforts to seek out growth and expansion opportunities for both electrical and galvanizing segments. The strength of our balance sheet and cash position fully supports this strategy. The Company is well positioned to capitalize on improving market conditions, in both segments."
AZZ incorporated is a global provider of specialty electrical equipment and highly engineered services to the power generation, transmission, distributions, and industrial markets as well as a leading provider of hot dip galvanizing services to the North American steel fabrication market.
Certain statements herein about our expectations of future events or results constitute forward-looking statements for purposes of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements by terminology such as, "may," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "continue," or the negative of these terms or other comparable terminology. Such forward-looking statements are based on currently available competitive, financial and economic data and management's views and assumptions regarding future events. Such forward-looking statements are inherently uncertain, and investors must recognize that actual results may differ from those expressed or implied in the forward-looking statements. This release may contain forward-looking statements that involve risks and uncertainties including, but not limited to, changes in customer demand and response to products and services offered by AZZ, including demand by the power generation markets, electrical transmission and distribution markets, the industrial markets, and the hot dip galvanizing markets; prices and raw material cost, including zinc and natural gas which are used in the hot dip galvanizing process; changes in the economic conditions of the various markets that AZZ serves, foreign and domestic, customer request delays of shipments, acquisition opportunities, currency exchange rates, adequacy of financing, and availability of experienced management employees to implement AZZ's growth strategy. AZZ has provided additional information regarding risks associated with the business in AZZ's Annual Report on Form 10-K for the fiscal year ended February 28, 2013 and other filings with the SEC, available for viewing on AZZ's website at www.azz.com and on the SEC's website at www.sec.gov. You are urged to consider these factors carefully in evaluating the forward-looking statements herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by this cautionary statement. These statements are based on information as of the date hereof and AZZ assumes no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise.
Contact:
Dana Perry, Senior Vice President – Finance and CFO
AZZ incorporated 817-810-0095
Internet: www.azz.com
Lytham Partners 602-889-9700
Joe Dorame or Robert Blum
Internet: www.lythampartners.com
Labor SMART, Inc. to Open First Three New Offices of 2014
Company Continues to See Growth in On-Demand Labor Market as Positive Sign of Strengthening Economy
Marketwired Labor SMART, Inc.
January 14, 2014 7:55 AM
HIRAM, GA--(Marketwired - Jan 14, 2014) - Labor SMART, Inc. (OTCQB: LTNC) (the "Company") an emerging provider of on-demand temporary staffing, today announced that it is opening three new offices as it continues to expand its geographic reach in the United States. The new offices will be located in Houston, Texas; Denver, Colorado; and St. Petersburg, Florida. The Houston and Denver offices mark the entry of Labor SMART into the states of Texas and Colorado. These are the first of several new offices planned for 2014 to meet the growing demand for temporary blue collar staffing needs of both large and small businesses.
Ryan Schadel, Labor SMART's CEO stated, "We continue to see growth in on-demand labor needs and believe this is a strong indication that the economy is strengthening. Because employers may still hesitate to hire full time employees for many reasons, we believe that the growth of on-demand temporary employment is indicative of a changing workplace and may signal a new paradigm that could render old ways of looking at employment data obsolete." Mr. Schadel reported that many companies prefer to use temporary workers as it is a cost-effective and smarter move than the more traditional hiring patterns of the past.
This trend appears to be demonstrated in Labor SMART's recently reported year-over-year growth. In 2013 Labor SMART revenues increased 130.7 percent compared to 2012. Mr. Schadel noted that industry analysts are calling for continued growth in this area.
Labor SMART has positioned itself to take advantage of this growth in the just-in-time labor market by providing unprecedented levels of service and having local presence in 15 growing markets, in states that include Georgia, Tennessee, Indiana, Kentucky, Florida, Alabama, South Carolina, North Carolina and Missouri in addition to the new offices opening in Texas and Colorado.
About Labor SMART, Inc.
Labor SMART, Inc. provides On-Demand temporary labor to a variety of industries. The Company's clients range from small businesses to Fortune 100 companies. Labor SMART was founded to provide reliable, dependable and flexible resources for on-demand personnel to small and large businesses in areas that include construction, manufacturing, hospitality, event-staffing, restoration, warehousing, retailing, disaster relief and cleanup, demolition and landscaping. Labor SMART believes it can make a positive each and every day for the benefit of its clients and temporary employees. The Company's mission is to be the provider of choice to its growing portfolio of customers with a service-focused approach that enables Labor SMART to be seen as a resource and partner to its clients.
Safe Harbor Statement
This release contains statements that constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements appear in a number of places in this release and include all statements that are not statements of historical fact regarding the intent, belief or current expectations of Labor SMART, Inc., its directors or its offices with respect to, among other things: (i) financing plans; (ii) trends affecting its financial condition or results of operations; (iii) growth strategy and operating strategy. The words "may," "would," "will," "expect," "estimate," "can," "believe," "potential," and similar expressions and variations thereof are intended to identify forward-looking statements. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond Labor SMART, Inc.'s ability to control, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors. More information about the potential factors that could affect the business and financial results is and will be included in Labor SMART, Inc.'s filings with the U.S. Securities and Exchange Commission.
Contact:
Bev Jedynak
Martin E. Janis & Company, Inc.
312-943-1123
shareholderrelations@laborsmart.com
Colgate-Palmolive Webcasts 2013 Fourth Quarter and Year-end Earnings Conference Call January 30, 2014 – 11:00 a.m. ET
Business Wire Colgate-Palmolive Company
22 hours ago
NEW YORK--(BUSINESS WIRE)--
Colgate-Palmolive Company (CL) will provide a live webcast of its 2013 fourth quarter and year-end earnings conference call on Thursday, January 30, 2014 at 11:00 a.m. ET. The call will be hosted by Chairman, President and CEO, Ian Cook, and Senior Vice President - Investor Relations, Bina Thompson.
Investors may access a live webcast of this conference call on Colgate’s web site at http://www.colgatepalmolive.com. For those unable to participate during the live webcast, a recorded version of the webcast will be made available through the ‘For Investors’ page of Colgate’s web site.
* * *
About Colgate-Palmolive: Colgate-Palmolive is a leading global consumer products company, tightly focused on Oral Care, Personal Care, Home Care and Pet Nutrition. Colgate sells its products in over 200 countries and territories around the world under such internationally recognized brand names as Colgate, Palmolive, Mennen, Softsoap, Irish Spring, Protex, Sorriso, Kolynos, elmex, Tom’s of Maine, Sanex, Ajax, Axion, Soupline, and Suavitel, as well as Hill's Science Diet and Hill's Prescription Diet. For more information about Colgate's global business, visit the Company's web site at http://www.colgatepalmolive.com. To learn more about Colgate’s global oral health education program, Bright Smiles, Bright Futures™, please visit http://www.colgatebsbf.com.
CL-E
Contact:
Colgate-Palmolive Company
Bina Thompson, 212-310-3072
Hope Spiller, 212-310-2291
Just in Time for Fitness Season and Staying in Shape Through the Holidays, Award-Winning Fitness DVD Distributor Acacia Releases New High-Intensity Workouts and a Celebrity Beginner Workout
R.I.P.P.E.D. Total Body Challenge, Power Boxing Workout With Olympian Marlen Esparza, and Lisa Whelchel's Everyday Workout for the Everyday Woman
GlobeNewswire RLJ Entertainment, Inc.
December 5, 2013 11:00 AM
SILVER SPRING, Md., Dec. 5, 2013 (GLOBE NEWSWIRE) -- With the weather getting colder and exercisers looking for indoor ways to stay in shape through the food-filled holidays, Acacia, an RLJ Entertainment, Inc. brand, is excited to announce the release of three new DVD workouts -- R.I.P.P.E.D. Total Body Challenge, Power Boxing Workout with Olympian Marlen Esparza, and Lisa Whelchel's Everyday Workout for the Everyday Woman. Whether you've been intimated in the past by workouts like Insanity or P90X, or you're looking for a new challenge, R.I.P.P.E.D. offers a new innovative, high-intensity workout which burns more than 700 calories in just 48 minutes. Next, a breakout star of the 2012 Olympics and America's first female medalist in Olympic boxing, Marlen Esparza offers four high-intensity workouts to help you gain strength, agility, cardio fitness, and mental toughness. Last, the popular Facts of Life star, Survivor runner-up, and mom of three, Lisa Whelchel, created an inspiring and accessible workout for people like her that dislike working out but, as they get older, want to remain healthy and active. The DVDs are available now at Amazon.com, AcaciaLifestyle.com, and select retailers, SRP: $16.99 each. Please visit youtube.com/AcaciaFitness to watch clips from each workout. Press copies are readily available upon request.
R.I.P.P.E.D. Total Body Challenge- Not Extreme, Not Insane, Just R.I.P.P.E.D.
Franchised to more than 8,000 fitness professionals across the country and approved by the American Council on Exercise, this safe, effective, interval-training system delivers amazing results with a scientifically proven, plateau-proof fitness formula to help shape and tone every body. In just five workout segments, plus a warm-up and cool down, you'll burn more than 700 calories in just 48 minutes. The workout was created by fitness power couple Terry and Tina Shorter, who also sing and compose all the addictive original music. With this athletic, musical driven format, you'll stay engaged, time will fly, you'll never get bored, and you'll achieve the strong, fit physique you've always wanted. Whether you're a fitness buff or beginner, you can achieve amazing results with R.I.P.P.E.D. (DVD Single, Approx. 48 min., plus bonus)
Power Boxing Workout with Marlen Esparza, Olympic Medalist
America's first female medalist in Olympic boxing, reigning seven-time USA Boxing National Champion, and motivational speaker Marlen Esparza debuts 4 high-intensity workouts. Ranked #1 in the United States, bronze medalist Marlen shares the unique workout routine that gets her into fighting shape to win competitions all over the world. Given the health and cardiovascular benefits of boxing training, whether you are a boxing fan or a newcomer, Marlen's new workouts will help you get a fit, lean and strong physique. She is also one of the select few that currently live and train at the U.S. Olympic Center in Colorado Springs in preparation for the 2016 Olympic Games. (DVD Single, Approx. 55 min., plus bonus)
Lisa Whelchel's Everyday Workout for the Everyday Woman
With the help of her trainer, Lisa leads these inspiring and accessible workouts geared towards beginners with a friendly, encouraging vibe and modifications for all levels plus personal training tips on proper body alignment, engaging the core, and breathing. The Facts of Life star and Survivor: Philippines fan favorite says, "I'm an everyday woman when it comes to fitness. I know exercise is key for my health and well-being, but I don't always enjoy doing it. And as a busy working mom, I have a hard time fitting workouts into my schedule. But I've learned that having fun with exercise can make all the difference. So I've teamed up with trainer Janice Clark to demonstrate two safe, sane, and effective workouts for women of all shapes and sizes." Lisa adds, "If you're an everyday woman like me who isn't looking for rock hard abs but wants to be healthier, stronger, more energetic, and have a looser waistband, follow us and have some fun!" (DVD Single, Approx. 44 min., plus bonus)
Acacia's award-winning fitness instructors are available for interviews. They can offer effective exercises, tips, full workouts, and advice in a wide variety of disciplines.
Acacia, an RLJ Entertainment, Inc. brand, is a leading producer of original and award-winning yoga, fitness, and wellness DVD programming. Acacia's workouts are from TV star and bestselling author Bethenny Frankel, the number one diet and fitness website SparkPeople, exhale spa's bestselling Core Fusion series, Leah Sarago's popular Ballet Body(TM) series, yoga superstar Shiva Rea, master kettlebell instructor Paul Katami, reality TV star Kenya Moore, best-selling author Dr. Vijay Vad's Arthritis Rx, Hilaria Baldwin's Fit Mommy-to-Be Prenatal Yoga, as well as Escape Your Shape: 21-Day Body Makeover, Lisa Whelchel's Everyday Workout for the Everyday Woman, R.I.P.P.E.D. Total Body Challenge, and Power Boxing Workout with Marlen Esparza. www.AcaciaLifestyle.com
RLJ Entertainment, Inc. (RLJE) is a premier independent licensee and distributor of entertainment content and programming in North America, the United Kingdom and Australia with over 5,300 exclusive titles. RLJE is a leader in numerous genres via its owned and distributed brands such as Acorn (British TV), Image (feature films, stand-up comedy), One Village (urban), Acacia (fitness), Slingshot (faith), Athena (documentaries), Criterion (art films) and Madacy (gift sets). These titles are distributed in multiple formats including DVD, Blu-Ray, digital download, digital streaming, broadcast television (including satellite and cable), theatrical and non-theatrical.
Via its relationship with Agatha Christie Limited, a company that RLJE owns 64% of, RLJE manages the intellectual property and publishing rights to some of the greatest works of mystery fiction, including stories of the iconic sleuths Miss Marple and Poirot. And through its direct-to-consumer business, RLJE has direct contacts and billing relationships with millions of consumers.
RLJE leverages its management experience to acquire, distribute, and monetize existing and original content for its many distribution channels, including its nascent branded digital subscription channels, and engages distinct audiences with programming that appeals directly to their unique viewing interests. RLJE has proprietary e-commerce web sites for the Acorn and Acacia brands, and owns the recently launched Acorn TV digital subscription service.
Contact:
Press Contact for interviews/DVDs:
Chad Campbell
Publicity Director, RLJ Entertainment, Inc. - Acacia brand
301-608-2115 *138, ccampbell@RLJEntertainment.com
Just in Time for Fitness Season and Staying in Shape Through the Holidays, Award-Winning Fitness DVD Distributor Acacia Releases New High-Intensity Workouts and a Celebrity Beginner Workout
R.I.P.P.E.D. Total Body Challenge, Power Boxing Workout With Olympian Marlen Esparza, and Lisa Whelchel's Everyday Workout for the Everyday Woman
GlobeNewswire RLJ Entertainment, Inc.
December 5, 2013 11:00 AM
SILVER SPRING, Md., Dec. 5, 2013 (GLOBE NEWSWIRE) -- With the weather getting colder and exercisers looking for indoor ways to stay in shape through the food-filled holidays, Acacia, an RLJ Entertainment, Inc. brand, is excited to announce the release of three new DVD workouts -- R.I.P.P.E.D. Total Body Challenge, Power Boxing Workout with Olympian Marlen Esparza, and Lisa Whelchel's Everyday Workout for the Everyday Woman. Whether you've been intimated in the past by workouts like Insanity or P90X, or you're looking for a new challenge, R.I.P.P.E.D. offers a new innovative, high-intensity workout which burns more than 700 calories in just 48 minutes. Next, a breakout star of the 2012 Olympics and America's first female medalist in Olympic boxing, Marlen Esparza offers four high-intensity workouts to help you gain strength, agility, cardio fitness, and mental toughness. Last, the popular Facts of Life star, Survivor runner-up, and mom of three, Lisa Whelchel, created an inspiring and accessible workout for people like her that dislike working out but, as they get older, want to remain healthy and active. The DVDs are available now at Amazon.com, AcaciaLifestyle.com, and select retailers, SRP: $16.99 each. Please visit youtube.com/AcaciaFitness to watch clips from each workout. Press copies are readily available upon request.
R.I.P.P.E.D. Total Body Challenge- Not Extreme, Not Insane, Just R.I.P.P.E.D.
Franchised to more than 8,000 fitness professionals across the country and approved by the American Council on Exercise, this safe, effective, interval-training system delivers amazing results with a scientifically proven, plateau-proof fitness formula to help shape and tone every body. In just five workout segments, plus a warm-up and cool down, you'll burn more than 700 calories in just 48 minutes. The workout was created by fitness power couple Terry and Tina Shorter, who also sing and compose all the addictive original music. With this athletic, musical driven format, you'll stay engaged, time will fly, you'll never get bored, and you'll achieve the strong, fit physique you've always wanted. Whether you're a fitness buff or beginner, you can achieve amazing results with R.I.P.P.E.D. (DVD Single, Approx. 48 min., plus bonus)
Power Boxing Workout with Marlen Esparza, Olympic Medalist
America's first female medalist in Olympic boxing, reigning seven-time USA Boxing National Champion, and motivational speaker Marlen Esparza debuts 4 high-intensity workouts. Ranked #1 in the United States, bronze medalist Marlen shares the unique workout routine that gets her into fighting shape to win competitions all over the world. Given the health and cardiovascular benefits of boxing training, whether you are a boxing fan or a newcomer, Marlen's new workouts will help you get a fit, lean and strong physique. She is also one of the select few that currently live and train at the U.S. Olympic Center in Colorado Springs in preparation for the 2016 Olympic Games. (DVD Single, Approx. 55 min., plus bonus)
Lisa Whelchel's Everyday Workout for the Everyday Woman
With the help of her trainer, Lisa leads these inspiring and accessible workouts geared towards beginners with a friendly, encouraging vibe and modifications for all levels plus personal training tips on proper body alignment, engaging the core, and breathing. The Facts of Life star and Survivor: Philippines fan favorite says, "I'm an everyday woman when it comes to fitness. I know exercise is key for my health and well-being, but I don't always enjoy doing it. And as a busy working mom, I have a hard time fitting workouts into my schedule. But I've learned that having fun with exercise can make all the difference. So I've teamed up with trainer Janice Clark to demonstrate two safe, sane, and effective workouts for women of all shapes and sizes." Lisa adds, "If you're an everyday woman like me who isn't looking for rock hard abs but wants to be healthier, stronger, more energetic, and have a looser waistband, follow us and have some fun!" (DVD Single, Approx. 44 min., plus bonus)
Acacia's award-winning fitness instructors are available for interviews. They can offer effective exercises, tips, full workouts, and advice in a wide variety of disciplines.
Acacia, an RLJ Entertainment, Inc. brand, is a leading producer of original and award-winning yoga, fitness, and wellness DVD programming. Acacia's workouts are from TV star and bestselling author Bethenny Frankel, the number one diet and fitness website SparkPeople, exhale spa's bestselling Core Fusion series, Leah Sarago's popular Ballet Body(TM) series, yoga superstar Shiva Rea, master kettlebell instructor Paul Katami, reality TV star Kenya Moore, best-selling author Dr. Vijay Vad's Arthritis Rx, Hilaria Baldwin's Fit Mommy-to-Be Prenatal Yoga, as well as Escape Your Shape: 21-Day Body Makeover, Lisa Whelchel's Everyday Workout for the Everyday Woman, R.I.P.P.E.D. Total Body Challenge, and Power Boxing Workout with Marlen Esparza. www.AcaciaLifestyle.com
RLJ Entertainment, Inc. (RLJE) is a premier independent licensee and distributor of entertainment content and programming in North America, the United Kingdom and Australia with over 5,300 exclusive titles. RLJE is a leader in numerous genres via its owned and distributed brands such as Acorn (British TV), Image (feature films, stand-up comedy), One Village (urban), Acacia (fitness), Slingshot (faith), Athena (documentaries), Criterion (art films) and Madacy (gift sets). These titles are distributed in multiple formats including DVD, Blu-Ray, digital download, digital streaming, broadcast television (including satellite and cable), theatrical and non-theatrical.
Via its relationship with Agatha Christie Limited, a company that RLJE owns 64% of, RLJE manages the intellectual property and publishing rights to some of the greatest works of mystery fiction, including stories of the iconic sleuths Miss Marple and Poirot. And through its direct-to-consumer business, RLJE has direct contacts and billing relationships with millions of consumers.
RLJE leverages its management experience to acquire, distribute, and monetize existing and original content for its many distribution channels, including its nascent branded digital subscription channels, and engages distinct audiences with programming that appeals directly to their unique viewing interests. RLJE has proprietary e-commerce web sites for the Acorn and Acacia brands, and owns the recently launched Acorn TV digital subscription service.
Contact:
Press Contact for interviews/DVDs:
Chad Campbell
Publicity Director, RLJ Entertainment, Inc. - Acacia brand
301-608-2115 *138, ccampbell@RLJEntertainment.com
Vitesse Schedules First Quarter Fiscal 2014 Earnings Call
Marketwired Vitesse Semiconductor
January 13, 2014 8:00 AM
CAMARILLO, CA--(Marketwired - Jan 13, 2014) - Vitesse Semiconductor Corporation (NASDAQ: VTSS), a leading provider of advanced IC solutions for Carrier and Enterprise networks, will conduct a conference call on Tuesday, February 4, 2014, at 1:30 p.m. Pacific Time / 4:30 p.m. Eastern Time to report financial results for the first quarter of fiscal year 2014.
To listen to the conference call via telephone, dial 888.430.8705 (U.S. toll-free) or 719.325.2215 (International) and provide the passcode 6663122. Participants should dial in at least 10 minutes prior to the start of the call. To listen via the Internet, the webcast can be accessed through the investor section of the Vitesse corporate web site at www.vitesse.com.
The playback of the conference call will be available approximately two hours after the call concludes and will be accessible on the Vitesse corporate web site or by calling 877.870.5176 (U.S. toll-free) or 858.384.5517 (International) and entering the passcode 6663122. The audio replay will be available for seven days.
About Vitesse
Vitesse (NASDAQ: VTSS) designs a diverse portfolio of high-performance semiconductor solutions for Carrier and Enterprise networks worldwide. Vitesse products enable the fastest-growing network infrastructure markets including Mobile Access/IP Edge, Cloud Computing, SMB/SME Enterprise and IoT Networking. Visit www.vitesse.com or follow us on Twitter @VitesseSemi.
Vitesse is a registered trademark of Vitesse Semiconductor Corporation in the United States and other jurisdictions. All other trademarks or registered trademarks mentioned herein are the property of their respective holders.
VTSS-F
Contact:
Company
Marty McDermut
Vitesse Semiconductor
www.vitesse.com
+1.805.388.3700
invest@vitesse.com
Agency
Becky Herrick
LHA
www.lhai.com
+1.415.433.3777
VTSS@lhai.com
The "Street has WETF coming in at .14 for the 4th Quarter and .39 for Full year 2013 that should be reported on or about January 27, 2014! All post's welcome! The "Good Dr's In"!
The "Street has WETF coming in at .14 for the 4th Quarter and .39 for Full year 2013 that should be reported on or about January 27, 2014! All post's welcome! The "Good Dr's In"!
Lakes Entertainment Announces Status Update Former Development Project
Business Wire Lakes Entertainment, Inc.
16 hours ago
MINNEAPOLIS--(BUSINESS WIRE)--
Lakes Entertainment, Inc. (LACO) announced that Penn National Gaming, Inc. (“Penn”) recently reported that the Jamul Indian Village of California (“Jamul”) and a wholly owned subsidiary of Penn announced the launch of construction activities at the site of the proposed $360 million Hollywood Casino Jamul on Jamul’s reservation in Jamul, California. Penn further reported that the Hollywood Casino Jamul, projected to open in late 2015, is expected to include a three-story gaming and entertainment facility of approximately 200,000 square feet, featuring over 1,700 slot machines, 50 live table games including poker, multiple restaurants, bars and lounges and an enclosed below grade parking structure with over 1,900 spaces
Jamul currently owes Lakes $60 million related to loans made by Lakes to Jamul in prior years under agreements for a potential casino development. Pursuant to a subordination agreement that Lakes entered into with Penn and Jamul, interest on such debt will accrue at 4.25% after the Hollywood Casino Jamul opens. Lakes agreed that it will subordinate repayment of such debt until the senior financing is paid in full, but that current interest on the subordinated debt will be paid to Lakes on a quarterly basis when the Hollywood Jamul Casino opens so long as there is no default under the senior financing agreement. When the senior financing is paid in full, Lakes will receive repayment of its outstanding principal and interest. During 2012, Lakes entered into ten-year option agreement with Penn that grants Penn the right to purchase approximately 98 acres of land which Lakes owns adjacent to Jamul’s reservation land. The purchase price for the land is $7 million which increases annually by 1%.
Tim Cope, President and Chief Financial Officer of Lakes, stated, “It is encouraging to read Penn Gaming is planning to start their initial development activities on the Jamul Tribe’s casino. We continue to be supportive of the Tribe’s effort to achieve their long-term dream. Any future recovery of amounts due to us from the Tribe will positively impact our financial position since these amounts are not currently reflected on our books.”
About Lakes Entertainment
Lakes Entertainment, Inc. currently owns the Rocky Gap Casino Resort near Cumberland, Maryland. Lakes has an investment in Rock Ohio Ventures, LLC’s casino and racino developments in Ohio, and an investment in Dania Entertainment Center, LLC’s Dania Jai Alai fronton in Dania Beach, Florida.
The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. Certain information included in this press release (as well as information included in oral statements or other written statements made or to be made by Lakes Entertainment, Inc.) contains statements that are forward-looking, such as statements relating to plans for future expansion and other business development activities as well as other capital spending, financing sources and the effects of regulation (including gaming and tax regulation) and competition. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements made by or on behalf of the company. These risks and uncertainties include, but are not limited to, those relating to the inability to complete or possible delays in completion of Lakes' casino projects, including various regulatory approvals and numerous other conditions which must be satisfied before completion of these projects; possible termination or adverse modification of management or development contracts; Lakes operates in a highly competitive industry; possible changes in regulations; reliance on continued positive relationships with Indian tribes and repayment of amounts owed to Lakes by Indian tribes; risks of entry into new businesses; reliance on Lakes' management and litigation costs. For more information, review the company's filings with the Securities and Exchange Commission.
Contact:
Investor Relations Contact:
BPC Financial Marketing
John Baldissera, 800-368-1217
or
For Further Information Contact:
Lakes Entertainment, Inc.
Timothy Cope, 952-449-7030
Stanley Black & Decker Announces Release Date for Fourth Quarter and Full Year 2013 Earnings
Business Wire Stanley Black & Decker
January 6, 2014 9:04 AM
NEW BRITAIN, Conn.--(BUSINESS WIRE)--
Stanley Black & Decker (SWK) will broadcast its fourth quarter and full year 2013 earnings conference call on Friday, January 24th, 2014. The call will begin at 8:00AM ET.
A news release outlining the financial results will be distributed before the market opens on Friday, January 24th. A slide presentation which will accompany the call will be available at www.stanleyblackanddecker.com and will remain available after the call.
The call will be accessible by telephone within the US at (800) 708-4540, from outside the U.S. at +1 (847) 619-6397, and via the Internet at www.stanleyblackanddecker.com. To participate, please register on the web site at least fifteen minutes prior to the call and download and install any necessary audio software. Please use the conference identification number 3640-8064. A replay will also be available two hours after the call and can be accessed at (888) 843-7419 or +1 (630) 652-3042 using the passcode 3640-8064#.
Stanley Black & Decker, an S&P 500 company, is a diversified global provider of hand tools, power tools and related accessories, mechanical access and electronic security solutions, healthcare solutions, engineered fastening systems, and more. Learn more at www.stanleyblackanddecker.com.
Contact:
Stanley Black & Decker
Greg Waybright, 860-827-3833
Vice President, Investor & Government Relations
greg.waybright@sbdinc.com
Stanley Black & Decker Announces Release Date for Fourth Quarter and Full Year 2013 Earnings
Business Wire Stanley Black & Decker
January 6, 2014 9:04 AM
NEW BRITAIN, Conn.--(BUSINESS WIRE)--
Stanley Black & Decker (SWK) will broadcast its fourth quarter and full year 2013 earnings conference call on Friday, January 24th, 2014. The call will begin at 8:00AM ET.
A news release outlining the financial results will be distributed before the market opens on Friday, January 24th. A slide presentation which will accompany the call will be available at www.stanleyblackanddecker.com and will remain available after the call.
The call will be accessible by telephone within the US at (800) 708-4540, from outside the U.S. at +1 (847) 619-6397, and via the Internet at www.stanleyblackanddecker.com. To participate, please register on the web site at least fifteen minutes prior to the call and download and install any necessary audio software. Please use the conference identification number 3640-8064. A replay will also be available two hours after the call and can be accessed at (888) 843-7419 or +1 (630) 652-3042 using the passcode 3640-8064#.
Stanley Black & Decker, an S&P 500 company, is a diversified global provider of hand tools, power tools and related accessories, mechanical access and electronic security solutions, healthcare solutions, engineered fastening systems, and more. Learn more at www.stanleyblackanddecker.com.
Contact:
Stanley Black & Decker
Greg Waybright, 860-827-3833
Vice President, Investor & Government Relations
greg.waybright@sbdinc.com
The "Street" has KKR coming in at .74 for the 4th quarter that should be reported on February 06, 2014! All post's welcome! The "Good Dr's In"!
The "Street" has KKR coming in at .74 for the 4th quarter that should be reported on February 06, 2014! All post's welcome! The "Good Dr's In"!
KKR & Co. L.P. to Announce Fourth Quarter 2013 Results
Business Wire KKR & Co. L.P.
11 hours ago
NEW YORK--(BUSINESS WIRE)--
KKR & Co. L.P. (KKR) announced today that it plans to release its financial results for the fourth quarter 2013 on Thursday, February 6, 2014, before the opening of trading on the New York Stock Exchange.
A conference call to discuss KKR’s financial results will be held on Thursday, February 6, 2014 at 10:00 a.m. EST. The conference call may be accessed by dialing (877) 303-2917 (U.S. callers) or +1 (253) 237-1135 (non-U.S. callers); a pass code is not required. Additionally, the conference call will be broadcast live over the Internet and may be accessed through the Investor Center section of KKR’s website at http://ir.kkr.com/kkr_ir/kkr_events.cfm.
A replay of the live broadcast will be available on KKR’s website or by dialing (855) 859-2056 (U.S. callers) or +1 (404) 537-3406 (non-U.S. callers), pass code 35363339, beginning approximately two hours after the broadcast.
ABOUT KKR
Founded in 1976 and led by Henry Kravis and George Roberts, KKR is a leading global investment firm with $90.2 billion in assets under management as of September 30, 2013. With offices around the world, KKR manages assets through a variety of investment funds and accounts covering multiple asset classes. KKR seeks to create value by bringing operational expertise to its portfolio companies and through active oversight and monitoring of its investments. KKR complements its investment expertise and strengthens interactions with fund investors through its client relationships and capital markets platform. KKR & Co L.P. is publicly traded on the New York Stock Exchange (KKR), and "KKR," as used in this release, includes its subsidiaries, their managed investment funds and accounts, and/or their affiliated investment vehicles, as appropriate.
Contact:
Investor Relations:
Craig Larson
Kohlberg Kravis Roberts & Co. L.P.
Tel: +1 (877) 610-4910 (U.S.) / +1 (212) 230-9410
investor-relations@kkr.com
or
Media:
Kristi Huller
Kohlberg Kravis Roberts & Co. L.P.
Tel: + 1 (212) 750-8300
media@kkr.com
Jewett-Cameron Announces 1st Quarter Financial Results
PR Newswire Jewett-Cameron Trading Company Ltd.
53 minutes ago
NORTH PLAINS, Ore., Jan. 13, 2014 /PRNewswire/ -- Jewett-Cameron Trading Company Ltd. (JCTCF) today reported financial results for the first quarter of fiscal 2014 ended November 30, 2013.
Sales were $8.01 million for the first quarter of fiscal 2014 compared to sales of $9.30 million for the first quarter of fiscal 2013. For the quarter, income from operations was $543,924 compared to $772,385 in the year-ago quarter. Net income for the quarter was $332,579, or $0.11 per share, compared to net income of $480,746, or $0.15 per share, in the first quarter of fiscal 2013. Per share amounts have been adjusted for the 2 for 1 stock split of the common shares effective May 2, 2013.
"Our markets have become much more competitive," said CEO Don Boone. "In response, we have increased our efforts to obtain new business and expand our customer base to smaller and mid-size customers. These initiatives resulted in higher selling expenses during the quarter."
As of November 30, 2013, the Company's cash position was $8.096 million, and currently there is no borrowing against its $5.0 million line of credit. Today, the Company announced a new share re-purchase plan where it can repurchase for cancellation up to 313,493 common shares representing 10% of the approximately 3.1 million common shares outstanding. This share repurchase plan may commence on January 20, 2014 and will remain in place until May 16, 2014 but may be limited or terminated at any time without prior notice.
About Jewett-Cameron Trading Company Ltd.
Jewett-Cameron Trading Company is a holding company that, through its subsidiaries, operates out of facilities located in North Plains, Oregon. Jewett-Cameron Company's business consists of the manufacturing and distribution of specialty metal products and wholesale distribution of wood products to home centers and other retailers located primarily in the United States. Greenwood Products is a processor and distributor of industrial wood and other specialty building products principally to customers in the marine and transportation industries in the United States. MSI-PRO is an importer and distributor of pneumatic air tools, industrial clamps, and the Avenger Products line of sawblades and other products. Jewett-Cameron Seed Company is a processor and distributor of agricultural seeds. JC USA provides professional and administrative services, including accounting and credit services, to its subsidiary companies.
Forward-looking Statements
The information in this release contains certain forward-looking statements that anticipate future trends and events. These statements are based on certain assumptions that may prove to be erroneous and are subject to certain risks, including but not limited to, the uncertainties of the Company's new product introductions, the risks of increased competition and technological change in the Company's industry, and other factors detailed in the Company's SEC filings. Accordingly, actual results may differ, possibly materially, from predictions contained herein.
JEWETT-CAMERON TRADING COMPANY LTD.
CONSOLIDATED BALANCE SHEETS
(Expressed in U.S. Dollars)
(Prepared by Management)
(Unaudited)
November 30,
2013
August 31,
2013
ASSETS
Current assets
Cash
$ 8,096,072
$ 8,308,445
Accounts receivable, net of allowance
of $Nil (August 31, 2013 - $Nil)
2,237,734
3,344,777
Inventory, net of allowance
of $134,259 (August 31, 2013 - $134,259) (note 3)
8,374,751
8,520,991
Note receivable
-
15,000
Prepaid expenses
883,172
587,609
Prepaid income taxes
43,744
270,423
Total current assets
19,635,473
21,047,245
Property, plant and equipment, net (note 4)
2,247,334
2,241,950
Intangible assets, net (note 5)
350,486
368,662
Total assets
$ 22,233,293
$ 23,657,857
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable
$ 453,525
$ 1,715,458
Litigation reserve (note 13(a))
137,442
144,103
Accrued liabilities
665,897
1,149,882
Total current liabilities
1,256,864
3,009,443
Deferred tax liability (note 6)
45,829
50,393
Total liabilities
1,302,693
3,059,836
Contingent liabilities and commitments (note 13)
Stockholders' equity
Capital stock (note 8)
Authorized
21,567,564 common shares, without par value
10,000,000 preferred shares, without par value
Issued
3,134,936 common shares (August 31, 2013 - 3,134,936)
1,479,246
1,479,246
Additional paid-in capital
600,804
600,804
Retained earnings
18,850,550
18,517,971
Total stockholders' equity
20,930,600
20,598,021
Total liabilities and stockholders' equity
$ 22,233,293
$ 23,657,857
JEWETT-CAMERON TRADING COMPANY LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Expressed in U.S. Dollars)
(Prepared by Management)
(Unaudited)
Three Months Ended
November 30,
2013
2012
SALES
$ 8,006,281
$ 9,296,405
COST OF SALES
6,156,502
7,305,399
GROSS PROFIT
1,849,779
1,991,006
OPERATING EXPENSES
Selling, general and administrative expenses
391,886
335,820
Depreciation and amortization
70,019
57,494
Wages and employee benefits
843,950
825,307
1,305,855
1,218,621
Income from operations
543,924
772,385
OTHER ITEMS
Interest and other income
6,661
16,710
Gain on sale of equipment
4,109
-
10,770
16,710
Income before income taxes
554,694
789,095
Income tax expense
(222,115)
(308,349)
Net income
$ 332,579
$ 480,746
Basic earnings per common share
$ 0.11
$ 0.15
Diluted earnings per common share
$ 0.11
$ 0.15
Weighted average number of common shares outstanding:
Basic
3,134,936
3,135,942
Diluted
3,134,936
3,135,942
JEWETT-CAMERON TRADING COMPANY LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in U.S. Dollars)
(Prepared by Management)
(Unaudited)
Three Month Periods
Ended November 30,
2013
2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net income
$ 332,579
$ 480,746
Items not involving an outlay of cash:
Depreciation and amortization
70,019
57,494
Gain on sale of equipment
(4,109)
-
Deferred income taxes
(4,564)
14,323
Interest income on litigation
(6,661)
(6,661)
Changes in non-cash working capital items:
Decrease in accounts receivable
1,107,043
426,020
Decrease in inventory
146,240
1,324,365
Decrease in note receivable
15,000
20,000
Decrease in prepaid income taxes
226,679
-
Increase in prepaid expenses
(295,563)
(1,579,612)
Decrease in accounts payable and accrued liabilities
(1,745,918)
(971,229)
Increase in accrued income taxes
-
293,754
Net cash provided (used) by operating activities
(159,255)
59,200
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment
(57,918)
(112,133)
Proceeds from sale of equipment
4,800
-
Net cash used in investing activities
(53,118)
(112,133)
Net decrease in cash
(212,373)
(52,933)
Cash, beginning of period
8,308,445
7,309,388
Cash, end of period
$ 8,096,072
$ 7,256,455
Contact: Don Boone, President & CEO, (503) 647-0110
Schnitzer Reports First Quarter 2014 Financial Results
Sequential Improvements in Financial Performance
Continued Progress on Cost Reductions
Business Wire Schnitzer Steel Industries, Inc.
January 8, 2014 8:30 AM
PORTLAND, Ore.--(BUSINESS WIRE)--
Schnitzer Steel Industries, Inc. (SCHN) today reported an adjusted loss per share of $(0.18) and a loss per share of $(0.23) for its fiscal 2014 first quarter ended November 30, 2013. Adjusted results for the first quarter exclude a $2 million, or $0.05 per share, restructuring charge associated with cost reduction initiatives. In the first quarter of fiscal 2013, the Company reported an adjusted loss per share of $(0.02) and a loss per share of $(0.06).
All three business segments generated positive operating income during the first quarter of fiscal 2014. As anticipated, our Metals Recycling Business improved sequentially, delivering results slightly above break-even. Our Auto Parts Business also improved compared to the fourth quarter of fiscal 2013, recording operating margins of 9%, excluding the impact of new stores added since the first quarter of fiscal 2013. Our Steel Manufacturing Business was in line sequentially notwithstanding a bad debt expense of $1 million, or $0.03 per share. The first quarter results also include a charge for deferred tax valuation allowances of $1 million, or $0.04 per share.
Market conditions improved as the quarter progressed. Both prices and demand were relatively weak in the first half of the quarter which impacted shipments in September and October. In the second half of the quarter, demand strengthened which increased prices by approximately $30 per ton. Consequently, performance in the last month of the quarter was significantly better than during the first two months. The softer demand at the start of the quarter resulted in an estimated adverse impact from average inventory costs of approximately $6 per ton in our Metals Recycling Business. Based on current market conditions and our cost reduction initiatives, we anticipate improved results in each of our businesses in the second quarter.
Summary Results
($ in millions, except per share amounts)
Quarter
1Q14 4Q13 1Q13
Revenues $ 588 $ 657 $ 593
Operating Income (Loss) $ (4 ) $ (348 ) $ 1
Goodwill Impairment Charge — 321 —
Other Asset Impairment Charges — 13 —
Restructuring Charges 2 3 2
Adjusted Operating Income (Loss)(1) $ (2 ) $ (11 ) $ 3
Net Loss attributable to SSI $ (6 ) $ (289 ) $ (2 )
Adjusted Net Loss attributable to SSI(1) $ (5 ) $ (14 ) $ (1 )
Net Loss per share attributable to SSI $ (0.23 ) $ (10.82 ) $ (0.06 )
Adjusted diluted EPS attributable to SSI(1) $ (0.18 ) $ (0.51 ) $ (0.02 )
(1) 1Q14 and 1Q13 include adjustments for restructuring charges. 4Q13 includes adjustments for a non-cash goodwill impairment charge, other asset impairment charges, restructuring charges and tax valuation allowances net of tax. See Non-GAAP Financial Measures for reconciliation to U.S. GAAP.
“Market conditions improved as the quarter progressed and, consequently, performance in the last month of the quarter was significantly better than during the first two months. All three business segments generated positive operating income, including higher sequential performance for both our Metals Recycling and Auto Parts Businesses, and a continuing trend of profitability in our Steel Manufacturing Business," said Tamara Lundgren, President and Chief Executive Officer. "We generated $26 million in operating cash flow in the first quarter, our cost reduction initiatives are underway to deliver at least $20 million of savings in fiscal 2014, and we continued to expand our Auto Parts Business platform by acquiring our fourth store in the greater Seattle-Tacoma metropolitan area which provides supply chain synergies with our Metals Recycling Business."
Key business drivers during the first quarter of fiscal 2014:
Metals Recycling Business (MRB) generated $1 million in operating income, including the estimated adverse impact from average inventory costing of approximately $6 per ton. The combination of improving market conditions, early benefits from our cost reduction program and non-recurrence of other cost items which impacted the previous quarter resulted in a sequential increase in MRB’s operating performance during the first quarter.
Auto Parts Business (APB) operating income of $6 million and margin of 9%, which excludes new sites added since the first quarter of fiscal 2013, represents sequential increases of $1 million and 200 basis points, respectively. Including the new stores, car purchase volumes increased by 15% from the prior year first quarter, primarily reflecting contributions from those stores.
Steel Manufacturing Business (SMB) operating income of $2 million reflected steady demand in the West Coast markets but was partially offset by a bad debt expense of $1 million from a customer bankruptcy.
Metals Recycling Business
Summary of Metals Recycling Business Results
($ in millions, except selling prices; Fe volumes 000s long tons; NFe volumes Ms lbs)
Quarter
1Q14 4Q13 Change 1Q13 Change
Total Revenues $ 490 $ 535 (8 )% $ 494 (1 )%
Ferrous Revenues $ 370 $ 398 (7 )% $ 370 — %
Ferrous Volumes 978 1,088 (10 )% 955 2 %
Avg. Net Ferrous Sales Prices ($/LT)(1) $ 348 $ 336 4 % $ 358 (3 )%
Nonferrous Revenues $ 113 $ 129 (12 )% $ 117 (3 )%
Nonferrous Volumes 124 141 (12 )% 119 4 %
Avg. Net Nonferrous Sales Prices ($/lb)(1) $ 0.89 $ 0.89 — % $ 0.95 (6 )%
Operating Income (Loss)(2) $ 1 $ (340 ) NM $ 6 (90 )%
Goodwill Impairment — 321 NM — NM
Asset Impairment Charges — 13 NM — NM
Adjusted Operating Income (Loss)(3) $ 1 $ (6 ) NM $ 6 (90 )%
(1) Sales prices are shown net of freight.
(2) Operating income (loss) does not include the impact of restructuring charges.
(3) See Non-GAAP Financial Measures for reconciliation to U.S. GAAP.
NM = Not meaningful
Sales Volumes: Ferrous sales volumes of 978 thousand tons in the first quarter increased 2% and nonferrous volumes of 124 million pounds increased 4% compared to the prior year first quarter.
Export customers accounted for 67% of total ferrous sales volumes in the first quarter. Our ferrous and nonferrous products were shipped to 14 countries, with China, South Korea and Turkey being the top ferrous export destinations.
Pricing: Export prices were soft in the first part of the first quarter, but increased by $30 per ton toward the end of the quarter. The combination of improving export prices and the strong domestic market led to higher average net ferrous selling prices as compared to the previous quarter while nonferrous prices were stable.
Margins: Operating income of $1 per ferrous ton, which included the estimated adverse impact of average inventory accounting of $6 per ton, was partially mitigated by improving market conditions and benefits of $3 million from implementation of cost reduction initiatives.
Auto Parts Business
Summary of Auto Parts Business Results
($ in millions)
Quarter
1Q14 4Q13 Change 1Q13 Change
Revenues $ 80 $ 79 1 % $ 70 14 %
Operating Income(1) $ 6 $ 3 76 % $ 6 (12 )%
Car Purchase Volumes (000s) 91 94 (3 )% 79 15 %
Locations (end of quarter) 62 61 2 % 51 22 %
(1) Operating income does not include the impact of restructuring charges.
Revenues: Revenues in the first quarter increased 14% from the prior year quarter due to incremental contributions from retail stores added since the first quarter of fiscal 2013.
Margins: Operating margins, excluding the impact of the stores added in fiscal 2013, increased sequentially to 9%. During the first quarter, APB incurred approximately $1 million of operating losses related to the new stores added since the first quarter of fiscal 2013, including integration and start-up costs, which lowered APB's reported operating margin to 7%. (See Non-GAAP Financial Measures for reconciliation to U.S. GAAP.)
New Sites: In November, APB acquired its fourth self-service retail store in the Seattle-Tacoma metropolitan area which expanded APB's presence in the Pacific Northwest market. This location will supply our Metals Recycling shredder in Tacoma, Washington, further enhancing synergies between our operating segments.
Steel Manufacturing Business
Summary of Steel Manufacturing Business Results
($ in millions, except selling prices; volume 000s of short tons)
Quarter
1Q14 4Q13 Change 1Q13 Change
Revenues $ 88 $ 96 (8 )% $ 92 (4 )%
Operating Income $ 2 $ 2 (20 )% $ 3 (49 )%
Avg. Net Sales Prices ($/ST) $ 657 $ 667 (1 )% $ 680 (3 )%
Finished Goods Sales Volumes 128 138 (7 )% 130 (1 )%
Sales Volumes: Finished steel sales volumes of 128 thousand tons approximated the prior year first quarter, reflecting steady demand for construction products on the West Coast.
Pricing: Average net sales prices for finished steel products of $657 per short ton declined slightly from the prior year quarter due to the impact of lower raw material prices on selling prices to end customers.
Margins: Operating income of $2 million approximated the fourth quarter of fiscal 2013 due to additional production efficiencies of $1 million, partially offset by slightly lower sales volumes and a bad debt expense of $1 million from a customer bankruptcy.
Cost Reductions
Our cost reduction initiatives to further reduce our annual operating expenses by $30 million continue to progress. Approximately 70% of the reduction is expected to benefit fiscal 2014 results, with the full annual benefit expected to be achieved in fiscal 2015. The reduction in operating expenses will primarily occur in MRB and be achieved through a combination of headcount reductions, implementation of transportation efficiencies, reduced lease costs, and other productivity and non-trade procurement savings. We achieved $4 million of benefits in the first quarter. We anticipate achieving a quarterly run rate of $6 million of benefits by the end of the second quarter. During the first quarter, we incurred a $2 million restructuring expense, or $0.05 per share, in connection with this cost reduction program.
Corporate Items
The Company's full year tax rate for fiscal 2014 is anticipated to be approximately 37%. The tax rate in the first quarter was a benefit of 12.7%, which was lower than the federal statutory rate primarily due to the recognition of a deferred tax valuation allowance on the results of foreign operations.
The Company generated $26 million in operating cash flow during the first quarter. Net debt of $364 million at the end of the first quarter decreased slightly from the end of the fourth quarter in fiscal 2013. (See Non-GAAP Financial Measures for reconciliation to U.S. GAAP.)
Analysts' Conference Call: First Quarter of Fiscal 2014
A conference call and slide presentation to discuss results will be held today, January 8, 2014, at 11:30 a.m. EDT hosted by Tamara Lundgren, President and Chief Executive Officer, and Richard Peach, Chief Financial Officer. The call and the slides will be webcast and accessible on the Company's website at www.schnitzersteel.com.
Summary financial data is provided in the following pages. The slides and related materials will be available prior to the call on the website.
SCHNITZER STEEL INDUSTRIES, INC.
FINANCIAL HIGHLIGHTS
(in thousands)
(Unaudited)
For the Three Months Ended
November 30, 2013 August 31, 2013 November 30, 2012
REVENUES:
Metal Recycling Business:
Ferrous sales $ 369,555 $ 397,947 $ 370,476
Nonferrous sales 113,154 129,199 116,601
Other sales 7,600 7,817 7,384
TOTAL MRB SALES 490,309 534,963 494,461
Auto Parts Business 79,635 79,231 69,555
Steel Manufacturing Business 88,123 96,235 92,029
Intercompany sales and eliminations (70,322 ) (53,844 ) (63,225 )
Total Revenues $ 587,745 $ 656,585 $ 592,820
OPERATING INCOME (LOSS):
Metal Recycling Business(1) $ 590 $ (6,097 ) $ 5,654
Auto Parts Business 5,609 3,191 6,364
Steel Manufacturing Business 1,744 2,169 3,404
Segment operating income (loss)(2) 7,943 (737 ) 15,422
Corporate expense (8,725 ) (10,188 ) (11,144 )
Intercompany eliminations (1,031 ) 299 (1,472 )
Adjusted operating income (loss) (1,813 ) (10,626 ) 2,806
Goodwill impairment charge — (321,000 ) —
Other asset impairment charges — (13,053 ) —
Restructuring charges (1,812 ) (2,900 ) (1,593 )
Total operating income (loss) $ (3,625 ) $ (347,579 ) $ 1,213
(1) MRB operating income for the three months ended August 31, 2013 is adjusted for goodwill impairment charge and other asset impairment charges. See Non-GAAP Financial Measures for reconciliation to U.S. GAAP.
(2) Segment operating income (loss) does not include the impact of restructuring charges.
SCHNITZER STEEL INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands)
(Unaudited)
For the Three Months Ended
November 30, 2013 August 31, 2013 November 30, 2012
Revenues $ 587,745 $ 656,586 $ 592,820
Cost of goods sold 542,417 620,457 541,884
Selling, general and administrative 47,550 47,388 47,995
(Income) loss from joint ventures (409 ) (633 ) 135
Goodwill impairment charge — 321,000 —
Other asset impairment charges — 13,053 —
Restructuring charges 1,812 2,900 1,593
Operating income (loss) (3,625 ) (347,579 ) 1,213
Interest expense (2,702 ) (2,584 ) (2,017 )
Other income (expense), net 176 (332 ) 321
Loss before income taxes (6,151 ) (350,495 ) (483 )
Income tax benefit (expense) 784 61,617 (960 )
Net loss (5,367 ) (288,878 ) (1,443 )
Net income attributable to noncontrolling interests (861 ) (356 ) (228 )
Net loss attributable to SSI $ (6,228 ) $ (289,234 ) $ (1,671 )
Net loss per share attributable to SSI - basic $ (0.23 ) $ (10.82 ) $ (0.06 )
Net loss per share attributable to SSI - diluted $ (0.23 ) $ (10.82 ) $ (0.06 )
Weighted average number of common shares:
Basic 26,755 26,733 26,567
Diluted 26,755 26,733 26,567
Dividends declared per common share $ 0.188 $ 0.188 $ 0.188
SCHNITZER STEEL INDUSTRIES, INC.
SELECTED OPERATING STATISTICS
(Unaudited)
Fiscal
1Q14 1Q13 2Q13 3Q13 4Q13 2013
Metals Recycling Business
Ferrous Selling Prices ($/LT) (1)
Domestic $ 356 $ 354 $ 363 $ 367 $ 346 $ 358
Exports 344 360 374 367 332 359
Average $ 348 $ 358 $ 372 $ 367 $ 336 $ 358
Ferrous Sales Volume (LT)
Domestic 322,531 279,450 260,509 314,240 288,112 1,142,311
Export 655,072 675,212 842,509 849,991 799,644 3,167,356
Total 977,603 954,662 1,103,018 1,164,231 1,087,756 4,309,667
Nonferrous Average Price ($/LB) (1) $ 0.89 $ 0.95 $ 0.97 $ 0.94 $ 0.89 $ 0.93
Nonferrous Sales Volume (LB, in 000s) 123,941 118,931 125,500 135,256 140,755 520,442
Steel Manufacturing Business
Sales Prices ($/ST) (1) (2)
Average $ 657 $ 680 $ 690 $ 687 $ 667 $ 680
Sales Volume (ST) (2)
Rebar 83,618 78,159 58,132 71,561 83,911 291,763
Coiled Products 38,322 45,533 32,130 46,088 46,334 170,085
Merchant Bar and Other 6,222 5,926 5,355 7,358 7,298 25,937
Total 128,162 129,618 95,617 125,007 137,543 487,785
Auto Parts Business
Car purchase volumes (000) 91 79 88 95 94 356
Number of self-service locations at end of quarter 62 51 59 61 61 61
(1) Price information is shown after a reduction for the cost of freight incurred to deliver the product to the customer
(2) Excludes billet sales
SCHNITZER STEEL INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
November 30, 2013 August 31, 2013
Assets
Current Assets:
Cash and cash equivalents $ 29,934 $ 13,481
Accounts receivable, net 125,975 188,270
Inventories, net 280,100 236,049
Other current assets 29,898 29,430
Total current assets 465,907 467,230
Property, plant and equipment, net 554,010 564,426
Goodwill and other assets 372,202 373,856
Total assets $ 1,392,119 $ 1,405,512
Liabilities and Equity
Current liabilities:
Short-term borrowings $ 613 $ 9,174
Other current liabilities 139,686 156,960
Total current liabilities 140,299 166,134
Long-term debt 393,426 372,663
Other long-term liabilities 86,123 85,516
Equity:
Total Schnitzer Steel Industries, Inc. ("SSI") shareholders' equity 767,264 776,558
Noncontrolling interests 5,007 4,641
Total equity 772,271 781,199
Total liabilities and equity $ 1,392,119 $ 1,405,512
Non-GAAP Financial Measures
This press release contains certain non-GAAP financial measures as defined under SEC rules such as adjusted operating income, adjusted net income attributable to SSI, adjusted diluted earnings per share attributable to SSI, operating income margin for APB stores owned more than a year and debt, net of cash. As required by SEC rules, the Company has provided reconciliations of these measures to the most directly comparable U.S. GAAP measures. Management believes that each of the foregoing adjusted non-GAAP financial measures provides a meaningful presentation of the Company's results from its core business operations excluding adjustments for restructuring charges that are not related to the Company's ongoing core business operations and improves the period-to-period comparability of the Company's results from its core business operations. In addition, management believes that the non-GAAP financial measure relating to the Auto Parts Business new stores impact provides a meaningful presentation of the operating segment's results by excluding operating results relating to newly added stores and thus improve period-to-period comparability of the results of the segment's core business. Management believes that debt, net of cash is a useful measure for investors because, as cash and cash equivalents can be used, among other things, to repay indebtedness, netting this against total debt is a useful measure of our leverage. These non-GAAP financial measures should be considered in addition to, but not as a substitute for, the most directly comparable U.S. GAAP measures.
Operating Income (Loss)
($ in millions) Quarter
1Q14 4Q13 1Q13
Consolidated Operating Income (Loss):
Operating Income (Loss) $ (4 ) $ (348 ) $ 1
Goodwill Impairment Charge — 321 —
Other Asset Impairment Charges — 13 —
Restructuring Charges 2 3 2
Adjusted Operating Income (Loss)
$ (2 ) $ (11 ) $ 3
MRB Operating Income (Loss):
Operating Income (Loss) $ 1 $ (340 ) $ 6
Goodwill Impairment Charge — 321 —
Other Asset Impairment Charges — 13 —
Adjusted Operating Income (Loss) $ 1 $ (6 ) $ 6
Net Loss attributable to SSI
($ in millions) Quarter
1Q14 4Q13 1Q13
Net Loss attributable to SSI $ (6 ) $ (289 ) $ (2 )
Goodwill impairment charge, net of tax — 254 —
Other asset impairment charges, net of tax — 9 —
Restructuring Charges, net of tax 1 1 1
Valuation allowance on deferred tax assets — 11 —
Adjusted Net Loss attributable to SSI $ (5 ) $ (14 ) $ (1 )
Diluted Earnings per share attributable to SSI
($ per share) Quarter
1Q14 4Q13 1Q13
Net loss per share attributable to SSI $ (0.23 ) $ (10.82 ) $ (0.06 )
Goodwill impairment charge, net of tax, per share — 9.52 —
Other asset impairment charges, net of tax, per share — 0.33 —
Restructuring Charges, net of tax, per share 0.05 0.05 0.04
Valuation allowance on deferred tax assets, per share — 0.41 —
Adjusted Diluted EPS attributable to SSI $ (0.18 ) $ (0.51 ) $ (0.02 )
Debt, Net of Cash
November 30, 2013 August 31, 2013
Short-term borrowings $ 613 $ 9,174
Long-term debt, net of current maturities 393,426 372,663
Total debt 394,039 381,837
Less: cash and cash equivalents 29,934 13,481
Total debt, net of cash $ 364,105 $ 368,356
Auto Parts Business New Stores Impact
($ in millions) 1Q14
Existing Stores(1) New Stores(2) Reported
Revenues 71 9 80
Operating Income (Loss)(3) 6 (1 ) 6
Operating Income Margin 9 % NM 7 %
Car Purchase Volumes (000) 80 11 91
4Q13
Existing Stores(1) New Stores(2) Reported
Revenues 72 7 79
Operating Income (Loss) 5 (2 ) 3
Operating Income Margin 7 % NM 4 %
Car Purchase Volumes (000) 84 10 94
(1) Existing Stores represents APB operations for stores owned one year or more.
(2) New Stores represent new acquisitions, or greenfield development, owned less than one year.
(3) Does not foot due to rounding
NM = Not meaningful
About Schnitzer Steel Industries, Inc.
Schnitzer Steel Industries, Inc. is one of the largest manufacturers and exporters of recycled ferrous metal products in the United States with 60 operating facilities located in 14 states, Puerto Rico and Western Canada. The business has seven deep water export facilities located on both the East and West Coasts and in Hawaii and Puerto Rico. The Company's integrated operating platform also includes its auto parts and steel manufacturing businesses. The Company's auto parts business sells used auto parts through its 61 self-service facilities located in 16 states and Western Canada. With an effective annual production capacity of approximately 800,000 tons, the Company's steel manufacturing business produces finished steel products, including rebar, wire rod and other specialty products. The Company commenced its 108th year of operations in 2014.
Safe Harbor for Forward-Looking Statements
Statements and information included in this press release that are not purely historical are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and are made pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Except as noted herein or as the context may otherwise require, all references to “we,” “our,” “us” and “SSI” refer to the Company and its consolidated subsidiaries.
Forward-looking statements in this press release include statements regarding our expectations, intentions, beliefs and strategies regarding the future, which may include statements regarding trends, cyclicality and changes in the markets we sell into; strategic direction; changes to manufacturing and production processes; the cost of compliance with environmental and other laws; expected tax rates, deductions and credits; the realization of deferred tax assets; planned capital expenditures; liquidity positions; ability to generate cash from continuing operations; the potential impact of adopting new accounting pronouncements; expected results, including pricing, sales volumes and profitability; obligations under our retirement plans; benefits, savings or additional costs from business realignment and cost containment programs; and the adequacy of accruals.
When used in this report, the words “believes,” “expects,” “anticipates,” “intends,” “assumes,” “estimates,” “evaluates,” “may,” “could,” “opinions,” “forecasts,” “future,” “forward,” “potential,” “probable,” and similar expressions are intended to identify forward-looking statements.
We may make other forward-looking statements from time to time, including in reports filed with the Securities and Exchange Commission, press releases and public conference calls. All forward-looking statements we make are based on information available to us at the time the statements are made, and we assume no obligation to update any forward-looking statements, except as may be required by law. Our business is subject to the effects of changes in domestic and global economic conditions and a number of other risks and uncertainties that could cause actual results to differ materially from those included in, or implied by, such forward-looking statements. Some of these risks and uncertainties are discussed in “Item 1A. Risk Factors” of our most recent annual report on Form 10-K. Examples of these risks include: potential environmental cleanup costs related to the Portland Harbor Superfund site; the impact of general economic conditions; volatile supply and demand conditions affecting prices and volumes in the markets for both our products and raw materials we purchase; difficulties associated with acquisitions and integration of acquired businesses; the impact of goodwill impairment charges; the impact of long-lived asset impairment charges; the realization of expected cost reductions related to restructuring initiatives; the inability of customers to fulfill their contractual obligations; the impact of foreign currency fluctuations; potential limitations on our ability to access capital resources and existing credit facilities; restrictions on our business and financial covenants under our bank credit agreement; the impact of the consolidation in the steel industry; the impact of imports of foreign steel into the U.S.; inability to realize expected benefits from investments in technology; freight rates and availability of transportation; impact of equipment upgrades and failures on production; product liability claims; the impact of impairment of our deferred tax assets; costs associated with compliance with environmental regulations; the adverse impact of climate change; inability to obtain or renew business licenses and permits; compliance with greenhouse gas emission regulations; reliance on employees subject to collective bargaining agreements; and the impact of the underfunded status of multiemployer plans in which we participate.
Contact:
Schnitzer Steel Industries, Inc.
Investor Relations:
Alexandra Deignan, 646-278-9711
adeignan@schn.com
or
Media Relations:
Tom Zelenka, 503-323-2821
tzelenka@schn.com
or
Company Info:
www.schnitzersteel.com
ir@schn.com