Johnson Controls Second-Quarter Eps Up 14% Outlook For Year Updated
Burscheid, Germany (ots)
April 16, 2002 ... Johnson Controls, Inc. (JCI) today reported that diluted earnings per share reached a record $1.21 for the second quarter of fiscal 2002, up 14% from $1.06 for the prior year. Sales for the three months ended March 31, 2002, were $4.8 billion, 5% higher than the $4.6 billion for the prior year. Operating income for the current quarter increased 5% to $218.7 million compared with the prior year's $208.5 million. Net income, aided by a lower effective income tax rate, increased 16% to $114.8 million from $99.0 million for the second quarter of fiscal 2001. Income comparisons are with last year's results that have been adjusted to exclude the effects of goodwill amortization expense. Total debt to total capitalization decreased to 41% from 43% at December 31, 2001 as a result of strong free cash flow in the quarter.
Automotive Systems Group (dollars in millions) Three Months Ended March 31, 2002 2001 % Sales $3,570.5 $3,372.5 6 Operating Income $ 158.0 $ 152.7 3
Automotive Systems Group sales increased 6% over the same period of 2001. North American sales of seating, interior systems and batteries were 7% higher than the prior year. Johnson Controls said that new interiors and battery business caused its revenues to exceed the 4% increase in domestic industry light vehicle production.
Automotive sales in Europe were 6% higher reflecting the inclusion of an electronics business and a battery business which were acquired in October 2001. Excluding the electronics acquisition and the negative effect of currency, European seating and interiors systems sales were approximately level with the prior year, which compares favorably with an estimated 9% decline in European industry vehicle production.
Johnson Controls sales in Asia, Japan and South America, which represent less than 10% of its automotive revenues worldwide, were substantially lower due to negative currency effects and reduced vehicle production levels.
Operating income for the Automotive Systems Group increased from the prior year amount due to the higher domestic sales and worldwide operational efficiencies. These improvements were partially offset by lower results in Europe where it incurred higher startup and engineering costs.
Controls Group (dollars in millions) Three Months Ended March 31, 2002 2001 % Sales $1,240.0 $1,229.1 1 Operating Income $ 60.7 $ 55.8 9
Controls Group sales to the nonresidential buildings market increased slightly over the 2001 period. North American sales were 4% higher reflecting increased service and integrated facility management volume. While revenues associated with control system installation contracts were comparable with the prior year, increases are anticipated during the balance of the year.
Sales outside North America decreased 4%, reflecting the deconsolidation of a joint venture in Japan and the negative effect of currency. These factors more than offset the inclusion of a European systems and services company acquired in the third quarter of fiscal 2001.
Controls Group operating income increased 9% over the 2001 period, with higher results due to the volume increases and productivity improvements.
First-Half Results and Full-Year Outlook
Year-to-date, Johnson Controls sales were $9.6 billion or 6% above the same period of 2001. Net income for the first six months of fiscal 2002 increased 8% to $235 million ($2.48 per diluted share,) up from $217 million ($2.33 per diluted share.)
According to Chairman and Chief Executive Officer James H. Keyes, higher than expected domestic demand for cars and light trucks has enabled the company to improve the outlook for its Automotive Systems Group. Its full-year automotive sales are anticipated to exceed the prior year by approximately 6% compared with the company's October 2001 forecast for 5% growth. The improvement from last fall's estimate is based on the following assumptions for industry light vehicle production: North America increases to 15.7 million units from 15.1 million previously forecast; Europe declines to 15.3 million from 15.6 million; and South America and Japan production declines versus the previous forecast for relatively stable levels.
The company also said that it now anticipates the automotive operating margin to be approximately level with the prior year whereas lower margins were expected six months ago. The improvement in margin is primarily due to the stronger than anticipated North American production environment and effective quality and cost initiatives.
Johnson Controls said that, based on the year-to-date sales increase of 5%, it anticipates that for the full year of fiscal 2002, the Controls Group will achieve sales growth of 6-10%, slightly lower than the 8-12% anticipated earlier. Mr. Keyes emphasized that demand remains strong with the backlog of uncompleted systems installation contracts 18% above the prior year level. He added that the Controls Group continues to expect modest margin improvement for the year.
Mr. Keyes said, "In summary, even before adding the benefit of the lower tax rate, we anticipate that Johnson Controls will be able to achieve another record year."
Following is a summary of supplementary full-year financial estimates for 2002:
(dollars in millions)
FY2001 FY2002
Actual Estimates
Capital expenditures $621 $575-600
Depreciation $434 $490-510
Amortization of intangibles $13* $20
Total debt to total capitalization 38% ± 38%
Interest expense,
net of interest income $110 $115-120
Effective income tax rate 36.6%* 34.8%
Minority interests in net earnings
of subsidiaries $53 $60-70*Adjusted to exclude the effects of goodwill amortization
The company has made forward-looking statements in this document that are subject to risks and uncertainties. Forward-looking statements include information concerning possible or assumed future risks and may include words such as "believes," "expects," "anticipates" or similar expressions. For those statements, the company cautions that numerous important factors, including industry vehicle production levels, US dollar exchange rates and those discussed in the company's Form 8-K (dated November 9, 2001), could affect the company's actual results and could cause its actual consolidated results to differ materially from those expressed in any forward-looking statement made by, or on behalf of, the company.
Johnson Controls, Inc. is a global market leader in automotive systems and facility management and control. In the automotive market, it is a leading supplier of seating and interior systems and batteries. For non-residential facilities, Johnson Controls provides building control components and systems and facility management services.
Johnson Controls (New York Stock Exchange: JCI), founded in 1885, has headquarters in Milwaukee, Wisconsin. The European head-quarters is in Burscheid, Germany. Its sales for 2001 totaled 18.4 billion US-Dollars, the Automotive Systems Group alone accounting for 13.6 billion US-Dollars of this figure. In the current "Industry Week" business magazine rankings, Johnson Controls has been listed as one of the top 100 best run companies in the world for the fifth time in succession.
Contact:
Johnson Controls GmbH
Claudia Steinhoff
Industriestr. 20-30
D-51399 Burscheid
Tel. + 49 21 74/65-32 43
Fax + 49 21 74/65-32 19