| |
Investor
News
3M Reports Record Quarterly Sales and Earnings
Q3 EPS Up Nearly 10% on 11% Volume Growth*
ST. PAUL, Minn., Oct. 23 /PRNewswire/ -- 3M today reported record
third-quarter earnings of $1.25 per share, an increase of 9.6 percent over
third-quarter 1999. Net income reached $499 million, up from $462 million in
the year-earlier quarter.
The quality of 3M earnings continues to be high, with operating income
19.2 percent of sales, net income 11.7 percent of sales and return on invested
capital 20.3 percent.
"3M continues to deliver solid, top-line-driven earnings growth," said
L.D. DeSimone, chairman and chief executive officer. "We're growing through a
strong flow of innovative products, close relationships with customers and our
strong international presence. These platforms provide us with many avenues
for growth, while cushioning us from disruptions in any single market or
region of the world."
Sales totaled $4.252 billion, an increase of 6.4 percent over the third
quarter last year. Unit sales increased 11 percent. Sales growth was
particularly strong in the Asia Pacific area, where 3M has built a strong
presence and continues to expand its product offerings. Currency translation
reduced global sales by 3 percent.
Nine-Month Results/Outlook
For the first nine months of 2000, earnings per share rose 14.1 percent to
a record $3.56. Currency effects reduced earnings for the period by 8 cents a
share, or nearly 3 percent. Net income totaled $1.425 billion, up from
$1.267 billion in the same period last year. Operating income was
18.8 percent of sales, up more than a half a percentage point from the same
period last year. Net income was 11.4 percent of sales and return on invested
capital was 19.7 percent.
Sales totaled $12.528 billion, an increase of nearly 8 percent from the
prior period. Unit sales rose 11 percent. Currency reduced revenues for the
period by 2 percent.
"We have good momentum, and we expect to meet earnings expectations for
the fourth quarter and next year," DeSimone said. "We have tremendous
technology platforms, a great portfolio of businesses, a strong flow of new
products, a global presence, and an effective and competitive infrastructure.
We're confident in our ability to continue to deliver solid, consistent
earnings growth."
3M will webcast its third-quarter conference call beginning at 9 a.m.
Eastern time today. This event will be available through 3M's website located
at http://199.230.26.96/mmm/index.html . Listeners should go to the website
at least 15 minutes prior to the call to register and download and install any
necessary audio software. A replay will be available beginning approximately
two hours after the event and continuing through Oct. 27.
* This news release discussion excludes non-recurring items in all
periods. During the third quarter of 2000, 3M incurred one-time, pre-tax
costs of approximately $118 million, primarily related to the company's
decision to phase out its perfluorooctanyl chemistry. These costs are
recorded in cost of goods sold. Third-quarter 2000 results also include
non-recurring gains of $119 million related to asset sales, principally the
sale of shares held in a company as result of a prior business relationship.
For the first nine months of 2000, net income of $1.425 billion, or $3.56 per
share, also excludes a $50 million benefit ($31 million after tax) related to
the termination of a marketing agreement in the company's health care
business. Third-quarter 1999 net income of $462 million, or $1.14 per share,
excludes non-recurring items totaling $4 million ($3 million after tax).
Third-quarter 1999 non-recurring items consist of a $73 million charge related
to litigation, gains on divestitures of $43 million, and a gain related to a
restructuring change in estimate of $26 million. Nine-month 1999 net income
of $1.267 billion, or $3.12 per share, also excludes non-recurring, pre-tax
second quarter items of $104 million related to gains on divestitures, net of
an investment valuation adjustment.
Forward-Looking Statements
Certain portions of this news release that do not relate to historical
financial information constitute forward-looking statements. These
forward-looking statements are subject to certain risks and uncertainties.
Actual future results and trends may differ materially from historical results
or those expected depending on a variety of factors, including: (1) worldwide
economic conditions; (2) foreign exchange rates and fluctuations in those
rates; (3) the timing and acceptance of new product offerings; (4) raw
materials, including shortages and increases in the costs of key raw
materials; (5) our ability to successfully manage acquisitions, divestitures
and strategic alliances; and (6) legal proceedings.
About 3M
3M is a $16 billion technology company with leading positions in
electronics, telecommunications, industrial, consumer and office, health care,
safety and other markets. Headquartered in St. Paul, Minnesota, the company
has operations in more than 60 countries and serves customers in nearly
200 countries. 3M businesses share technologies, manufacturing operations,
brands, marketing channels and other important resources. 3M is one of the
30 stocks that make up the Dow Jones Industrial Average and also is a
component of the Standard & Poor's 500 Index. Additional information about
the company is available on the Internet at http://www.3m.com/ .
Minnesota Mining and Manufacturing Company and Subsidiaries
(Unaudited)
Sales Change Analysis
Third-Quarter 2000
U.S. International Worldwide
Volume 5.5% 16% 11%
Price (1) (2) (1.5)
Translation -- (6) (3)
Total 4.5% 8% 6.5%
Sales Change Analysis
Year-to-Date 2000
U.S. International Worldwide
Volume 7% 15% 11%
Price (1) (2) (1.5)
Translation -- (3.5) (2)
Total 6% 9.5% 7.5%
Minnesota Mining and Manufacturing Company and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME (Unaudited)
3 Months Ended 9 Months Ended
September 30 September 30
(Amounts in millions,
except per-share amounts) 2000 1999 2000 1999
Net sales $4,252 $3,997 $12,528 $11,636
Operating expenses
Cost of goods sold 2,479 2,253 7,124 6,603
Selling, general and
administrative
expenses 1,073 979 3,162 2,919
Restructuring credit -- (26) -- (26)
Other expense (income)
-- net (119) 30 (169) (74)
Total 3,433 3,236 10,117 9,422
Operating income 819 761 2,411 2,214
Other income and expense
Interest expense 29 26 81 83
Investment and other
income -- net (4) (7) (16) (22)
Total 25 19 65 61
Income before income taxes
and minority interest 794 742 2,346 2,153
Provision for
income taxes 274 260 821 776
Minority interest 21 23 69 58
Net income $ 499 $ 459 $ 1,456 $ 1,319
Weighted average common shares
outstanding -- basic 395.1 402.1 396.1 402.5
Earnings per share
-- basic $ 1.26 $ 1.14 $ 3.67 $ 3.28
Weighted average common shares
outstanding -- diluted 399.0 406.8 400.0 406.5
Earnings per share
-- diluted $ 1.25 $ 1.13 $ 3.64 $ 3.25
Minnesota Mining and Manufacturing Company and Subsidiaries
SUPPLEMENTAL CONSOLIDATED STATEMENT OF INCOME INFORMATION (Unaudited)
(Amounts in millions, except per-share amounts)
3 Months Ended 3 Months Ended
Sept. 30, 2000 Sept. 30, 1999
Excluding Excluding
Non- Non- Non- Non-
recurring recurring Reported recurring recurring Reported
Items Items Total Items Items Total
Operating income
(loss) $ 818 $ 1 $ 819 $ 765 $ (4) $ 761
Other income and
expense $ 25 -- $ 25 $ 19 -- $ 19
Income (loss) before
income taxes and
minority
interest $ 793 $ 1 $ 794 $ 746 $ (4) $ 742
Provision (benefit)
for income
taxes $ 273 $ 1 $ 274 $ 261 $ (1) $ 260
Effective tax rate 34.4% 34.5% 35.0% 27.3% 35.0%
Minority interest $ 21 -- $ 21 $ 23 -- $ 23
Net income (loss) $ 499 -- $ 499 $ 462 $ (3) $ 459
Per share --
diluted $1.25 -- $1.25 $1.14 $(0.01) $1.13
9 Months Ended 9 Months Ended
Sept. 30, 2000 Sept. 30, 1999
Excluding Excluding
Non- Non- Non- Non-
recurring recurring Reported recurring recurring Reported
Items Items Total Items Items Total
Operating income $2,360 $ 51 $2,411 $2,114 $ 100 $2,214
Other income
and expense $ 65 -- $ 65 $ 61 -- $ 61
Income before
income taxes and
minority
interest $2,295 $ 51 $2,346 $2,053 $ 100 $2,153
Provision for
income taxes $ 801 $ 20 $ 821 $ 728 $ 48 $ 776
Effective tax rate 34.9% 39.7% 35.0 35.5% 47.8% 36.0%
Minority interest $ 69 -- $ 69 $ 58 -- $ 58
Net income $1,425 $ 31 $1,456 $1,267 $ 52 $1,319
Per share
-- diluted $ 3.56 $0.08 $ 3.64 $ 3.12 $0.13 $ 3.25
Minnesota Mining and Manufacturing Company and Subsidiaries
CONSOLIDATED BALANCE SHEET (Unaudited)
Sept. 30 Dec. 31
(Dollars in millions) 2000 1999
Assets
Current assets
Cash and cash equivalents $ 323 $ 387
Other securities -- 54
Accounts receivable -- net 3,057 2,778
Inventories 2,236 2,030
Other current assets 1,035 817
Total current assets 6,651 6,066
Property, plant and equipment -- net 5,536 5,656
Investments and other assets 2,495 2,174
Total $14,682 $13,896
Liabilities and Stockholders' Equity
Current liabilities
Short-term debt $ 1,633 $ 1,130
Other current liabilities 3,197 2,689
Total current liabilities 4,830 3,819
Long-term debt 1,141 1,480
Other liabilities 2,262 2,308
Stockholders' equity -- net 6,449 6,289
Shares outstanding
Sept. 30, 2000: 394,433,465 shares
Dec. 31, 1999: 398,710,817 shares
Total $14,682 $13,896
Business Segments:
In the first quarter of 2000, business segment operating income for
1999 was restated for minor amounts, to be consistent with year 2000
management reporting practices. Certain costs previously included in
Corporate and Unallocated were allocated to the individual business
segments. 3M net sales and operating income by segment for 1999 and
2000 follow.
Business
Segment
Information Third Quarter Second Quarter First Quarter
(Millions) 2000 1999 2000 1999 2000 1999
Net sales
Industrial $ 885 $ 851 $ 873 $ 836 $ 911 $ 842
Transportation,
Graphics and Safety 891 826 912 806 872 777
Health Care 773 768 794 793 765 768
Consumer and Office 750 712 692 638 687 638
Electro and
Communications 654 534 642 485 505 442
Specialty Material 292 298 302 292 305 292
Corporate and
Unallocated 7 8 9 13 7 17
Total Company $4,252 $3,997 $4,224 $3,863 $4,052 $3,776
Operating income
Industrial $ 166 $ 154 $ 153 $ 154 $ 185 $ 148
Transportation,
Graphics and Safety 194 184 213 171 209 148
Health Care 165 183 158 194 193 144
Consumer and Office 132 121 102 95 105 88
Electro and
Communications 111 119 105 90 89 82
Specialty Material (43) 50 57 60 51 55
Corporate and
Unallocated 94 (50) (11) 40 (17) (16)
Total Company $ 819 $ 761 $ 777 $ 804 $ 815 $ 649
Third quarter 2000 operating income includes non-recurring costs of
$118 million and non-recurring gains of $119 million. Non-recurring items
by segment in the third quarter of 2000 include $106 million of costs in the
Specialty Material segment related to the company's phase out of
perfluorooctanyl chemistry. Remaining non-recurring items in the third
quarter of 2000 were largely gains related to asset sales and are primarily
recorded in Corporate and Unallocated. First quarter 2000 operating income
includes a $50 million benefit relating to the termination of a product
distribution agreement in the Health Care segment. Third quarter 1999
operating income includes a $43 million gain related to divestitures, mainly
in the Health Care area, and Corporate and Unallocated includes $73 million in
litigation expense partially offset by a $26 million change in estimate that
reduced the restructuring charge. Second quarter 1999 operating income
includes gains on divestitures, net of an investment valuation adjustment, of
$30 million in Health Care and $74 million in Corporate and Unallocated.
SOURCE 3M
Web site: http://www.mmm.com/
Photo: NewsCom:
http://www.newscom.com/cgi-bin/prnh/19990915/MMMLOGO AP Archive:
http://photoarchive.ap.org/ PRN Photo Desk, 888-776-6555 or
201-369-3467
CONTACT: Jon Greer, investors, 651-736-1915, or jagreer@mmm.com,
or Matt Ginter, investors, 651-733-8206, or mjginter@mmm.com; or
John Cornwell, media, 651-733-7698, or jrcornwell@mmm.com, all of
3M
|
