-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JwixZ6lLSHB1qQ6kpqOgb7dUOmbRX/nNrNS512hynn74d5R3xYePwOpD+7UsJsLE u3ExhdSFRDMMg5eD3yXvqQ== 0000030554-99-000046.txt : 19990729 0000030554-99-000046.hdr.sgml : 19990729 ACCESSION NUMBER: 0000030554-99-000046 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990728 ITEM INFORMATION: FILED AS OF DATE: 19990728 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DUPONT E I DE NEMOURS & CO CENTRAL INDEX KEY: 0000030554 STANDARD INDUSTRIAL CLASSIFICATION: PLASTIC MAIL, SYNTH RESIN/RUBBER, CELLULOS (NO GLASS) [2820] IRS NUMBER: 510014090 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-00815 FILM NUMBER: 99671555 BUSINESS ADDRESS: STREET 1: 1007 MARKET ST CITY: WILMINGTON STATE: DE ZIP: 19898 BUSINESS PHONE: 3027741000 8-K 1 CURRENT REPORT SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of Earliest Event Reported) July 28, 1999 E. I. du Pont de Nemours and Company (Exact Name of Registrant as Specified in Its Charter) Delaware 1-815 51-0014090 (State or Other Jurisdiction (Commission (I.R.S Employer of Incorporation) File Number) Identification No.) 1007 Market Street Wilmington, Delaware 19898 (Address of principal executive offices) Registrant's telephone number, including area code: (302) 774-1000 1 Item 7. Financial Statements and Exhibits --------------------------------- In connection with Debt and/or Equity Securities that may be offered on a delayed or continuous basis under Registration Statements on Form S-3 (No. 33-53327, No. 33-61339 and No. 33-60069), we hereby file the following press release. Exhibit Number Description of Exhibit ------- ------------------------------------------------- 99 Copy of the Registrant's Earnings Press Release, dated July 28, 1999. 2 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. E. I. DU PONT DE NEMOURS AND COMPANY (Registrant) /s/ D. B. Smith ------------------------------------ D. B. Smith Assistant Controller July 28, 1999 3 EXHIBIT INDEX Exhibit Number Description of Exhibits - ------- ------------------------------------------------------------ 99 Copy of the Registrant's Earnings Press Release, dated July 28, 1999. 4 EXHIBIT 99 Contact: Susan Gaffney (302) 774-2698 DUPONT REPORTS SECOND QUARTER 1999 EARNINGS ------------------------------------------- Wilmington, Del., July 28 -- DuPont reported second quarter earnings per share from continuing operations before nonrecurring items of $.78 up 7 percent from second quarter earnings of $.73 last year. Including discontinued operations and nonrecurring items, diluted earnings per share were $.80 compared to $.83 in 1998. Earnings Comparisons - Second Quarter ------------------------------------- Including Nonrecurring (per share diluted) Underlying Items -------------- -------------- 1999 1998 1999 1998 ---- ---- ---- ---- Continuing Operations $.78 $.73 $.74 $.69 Discontinued Operations .06 .14 .06 .14 ---- ---- ---- ---- $.84 $.87 $.80 $.83 Highlights of the Quarter - ------------------------- o Sales increased to $7.0 billion, up 9 percent from the prior year reflecting growth from acquisitions. o Underlying income from continuing operations increased 6 percent to $886 million, the second highest level in DuPont history. 5 o Plans are being implemented for streamlining operations, consolidating manufacturing, and workforce reductions to improve performance in the Polyester Enterprise and the Crop Protection products and Performance Coatings businesses. o The DuPont/Conoco exchange offer commenced July 12 offering U.S. shareholders 2.95 shares of Conoco Class B common stock in exchange for one share of DuPont common. This offer will expire August 6 and is being made through a registration statement filed with the U.S. Securities and Exchange Commission. "We are pleased to have regained our earnings growth momentum, even in the face of continuing price declines," said Charles O. Holliday, Jr., chairman and CEO. "Although the polyester industry and U.S. agriculture markets remain weak, most of our other businesses began to see some volume improve- ment. While economic conditions in Europe and South America remain sluggish and raw material costs are increasing, we remain optimistic for continued year-over-year earnings growth." RESULTS FROM CONTINUING OPERATIONS - ---------------------------------- Sales in the quarter were $7.0 billion, up 9 percent from $6.4 billion in the second quarter of 1998, with acquisi- tions adding 13 percent to top-line growth. Excluding acquisi- tions, worldwide volumes declined about 1 percent, while prices were down 3 percent. Adverse currency effect from a stronger dollar was less than 1 percent. The Asia Pacific region turned in a strong performance with a sales increase of 16 percent on 20 percent volume growth, reflecting gains in nearly all business units. 6 European sales were up 20 percent, with volumes up 24 percent. Excluding the Herberts acquisition, volumes were down 2 percent, while prices, reflecting a stronger dollar, declined 4 percent. U.S. volumes were down 3 percent compared to last year's second quarter. Excluding the adverse volume impact resulting from weakness in the crop protection products business, U.S. volume was up 1 percent. Prices were down 3 percent, adversely affected by significantly lower polyester fiber prices. Excluding nonrecurring items, income from continuing operations for the second quarter 1999 was $886 million, com- pared to $839 million in 1998. Nonrecurring charges totaling $40 million and $45 million were taken in 1999 and 1998, respectively. The current quarter's nonrecurring item relates to employee separation costs for Polyester Enterprise staffing reductions as described in the accompanying footnotes. Second quarter 1998 nonrecurring charges were for employee separation costs recorded in connection with rationalization of the global Nylon Enterprise. Segment Analysis ---------------- The following compares the second quarter 1999 with the second quarter 1998 for segment sales and earnings before nonrecurring items. Total segment underlying after-tax operating income was $1,008 million compared to $975 million last year. Total segment sales were $7.9 billion, compared to $7.5 billion last year. 7 Agriculture & Nutrition segment earnings were down 13 percent, principally reflecting weakness in the U.S. crop protection business for corn and soybeans, partly offset by better results for Nutrition & Health. Segment sales declined 11 percent reflecting a significant volume decrease in the United States and eastern European Crop Protection Products markets. Nylon Enterprise segment earnings were down 20 percent reflecting lower sales as higher volumes were more than offset by lower prices. Apparel and industrial markets continue to show weakness, while residential flooring remains strong in North America. Performance Coatings & Polymers segment earnings were up 25 percent reflecting higher earnings across all business units. Sales were up 39 percent reflecting the addition of the Herberts acquisition and an average of 5 percent higher sales volume in the remaining businesses. Pharmaceuticals segment earnings were up 96 percent, primarily due to earnings improvements from "Sustiva" and "Cozaar" as well as the current 100 percent ownership, increased from 50 percent last year. Partly offsetting these improvements were higher research and development costs and expected lower sales of "Coumadin". 8 Pigments and Chemicals segment earnings were up 15 percent, reflecting increased earnings for white pigments and fluorochemicals. Fluorochemicals benefited from increased sales of CFC alternative products, and white pigments from growing volumes in Asia Pacific and lower raw material costs. Polyester Enterprise segment posted a loss of $13 million versus earnings of $1 million last year. Sales were down 12 percent reflecting both excess capacity and intense competitive pressures in the industry. Specialty Fibers segment sales and earnings each increased 4 percent, reflecting better results for "Lycra" spandex and nonwovens. "Lycra" volumes remain strong but average prices were adversely affected due to a combination of competitive pricing and currency weakness in Europe and South America. Specialty Polymers segment earnings were essentially flat as earnings improvements in Photopolymers and Electronic Materials and "Corian" were offset by declines for Packaging and Industrial Polymers and Fluoropolymers. The Other segment earnings were $12 million versus a loss of $5 million last year. This principally reflects the absence of staff employee separation costs incurred last year, and a benefit from internal service billings to businesses exceeding actual costs for staff services, consistent with internal segment reporting. This billing difference will be eliminated by year-end. 9 DISCONTINUED OPERATIONS - ----------------------- Income from discontinued operations (Conoco, DuPont's energy subsidiary) was $71 million compared to $165 million in last year's second quarter, down 57 percent principally reflect- ing lower natural gas prices and lower downstream volumes and margins, partly offset by higher oil prices. These factors, combined with the reduction of the company's ownership to about 70 percent, resulted in a significant earnings decline. Please refer to the press release issued by Conoco today for additional information and perspective regarding its operations. Forward-Looking Statements This news release contains forward- looking statements based on management's current expectations, estimates and projections. All statements that address expec- tations or projections about the future, including statements about the company's strategy for growth, product development, market position, expected expenditures and financial results are forward-looking statements. Some of the forward-looking state- ments may be identified by words like "expects," "anticipates," "plans," "intends," "projects," "indicates," and similar expressions. These statements are not guarantees of future performance and involve a number of risks, uncertainties and assumptions. Many factors, including those discussed more fully elsewhere in this release and in DuPont's filings with the Securities and Exchange Commission, particularly its latest annual report on Form 10-K, as well as others, could cause results to differ materially from those stated. These factors include, but are not limited to changes in the laws, regula- tions, policies and economic conditions of countries in which the company does business; competitive pressures; successful integration of structural changes, including acquisitions, divestitures and alliances; failure of the company or related third parties to become Year 2000 capable; research and development of new products, including regulatory approval and market acceptance. ### 7/28/99 10 E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES
Three Months Ended Six Months Ended CONSOLIDATED INCOME STATEMENT June 30 June 30 - ----------------------------------------------------------------------------------------------------------------------- (Dollars in millions, except per share) 1999 1998 1999 1998 - ---------------------------------------------------------------------------------------------------------------------- SALES ........................................................ $6,994 $6,432 $13,289 $12,626 Other Income ............................................. 235 192 253 489 ------ ------ ------- ------- Total .................................................... 7,229 6,624 13,542 13,115 ------ ------ ------- ------- Cost of Goods Sold and Other Expenses .................... 4,381 4,057 8,254 8,106 Selling, General and Administrative Expenses ................. 625 506 1,160 985 Depreciation and Amortization ................................ 373 367 708 699 Research and Development ..................................... 387 274 745 538 Interest Expense ............................................. 117 129 213 256 Purchased In-Process Research and Development ............ - - 40 60 Employee Separation Costs and Write-Down of Assets ....... 62 68 62 186 ------ ------ ------- ------- Total .................................................... 5,945 5,401 11,182 10,830 ------ ------ ------- ------- INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND AND MINORITY INTERESTS ...................................... 1,284 1,223 2,360 2,285 Provision for Income Tax Expenses ............................ 418 416 850 833 Minority Interests in Earnings of Consolidated Subsidiaries .. 20 13 36 21 ------ ------ ------- ------- INCOME FROM CONTINUING OPERATIONS ............................ 846 794 1,474 1,431 DISCONTINUED OPERATIONS Income from Operations of Discontinued Business, Net of Income Taxes ...................................... - 165 - 434 Gain on Disposal of Discontinued Business, Net of Income Taxes ...................................... 71 - 106 - ------ ------ ------- ------- NET INCOME ................................................... $ 917 $ 959 $ 1,580 $ 1,865 ====== ====== ======= ======= BASIC EARNINGS PER SHARE OF COMMON STOCK Continuing Operations ...................................... $ .75 $ .70 $ 1.30 $ 1.26 Discontinued Operations .................................... .06 .15 .10 .39 ------ ------ ------- ------- Net Income ................................................. $ .81 $ .85 $ 1.40 $ 1.65 ====== ====== ======= ======= DILUTED EARNINGS PER SHARE OF COMMON STOCK Continuing Operations ...................................... $ .74 $ .69 $ 1.29 $ 1.24 Discontinued Operations .................................... .06 .14 .09 .38 ------ ------ ------- ------- Net Income ................................................. $ .80 $ .83 $ 1.38 $ 1.62 ====== ====== ======= ======= DIVIDENDS PER SHARE OF COMMON STOCK .......................... $ .35 $ .35 $ .70 $ .665 ====== ====== ======= =======
11 [FN] NOTES TO CONSOLIDATED INCOME STATEMENT - -------------------------------------- Amortization of intangible assets is principally reported in Cost of Goods Sold and Other Expenses. Amortization for companies accounted for under the equity method is reported in Other Income. Total amortization of intangible assets was $61 and $107 for the second quarter and year-to-date 1999, respectively. Amounts for comparable periods of 1998 were $23 and $58, respectively. Includes an exchange loss of $131 on forward exchange contracts purchased in 1998 to lock in the U.S. dollar cost of the acquisition of Herberts, the automotive coatings business of Hoechst AG. The purchase price for Herberts was negotiated in German marks. Purchased in-process research and development represents the value assigned in a purchase business combination to research and development projects of the acquired business that were in progress at the time of purchase for which technological feasibility has not yet been established and no alternative future use is anticipated. Year-to-date 1999 represents an estimated charge that was recorded in the first quarter in conjunction with the purchase of Herberts based on preliminary allocations of purchase price that are subject to revision upon completion of valuations and purchase accounting allocations. Year-to-date 1998 represents a charge for revision, based on finalization of the purchase price allocation in conjunction with the purchase of Protein Technologies International. Second quarter 1999 charges of $62 result from employee separation costs for about 850 employees within the Polyester Enterprise. Second quarter 1998 charges of $68 result from employee separation costs for about 950 people within the Nylon Enterprise. Year-to-date 1998 charges also include $40 of employee separation costs within the Nylon Enterprise related to the termination of about 550 employees and $78 for the shutdown of related manufacturing facilities. Earnings per share are calculated on the basis of the following average number of common shares: Three Months Ended Six Months Ended June 30 June 30 ------------------------------ ------------------------------ Basic Diluted Basic Diluted ------------- ------------- ------------- ------------- 1999 1,129,006,814 1,144,189,906 1,128,051,977 1,141,147,812 1998 1,129,926,272 1,151,784,525 1,129,175,175 1,148,733,824 12 E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED SEGMENT INFORMATION - Three Months Ended Six Months Ended CONTINUING OPERATIONS June 30 June 30 - ----------------------------------------------------------------------------------------------------------------------- (Dollars in millions) 1999 1998 1999 1998 - ---------------------------------------------------------------------------------------------------------------------- SEGMENT SALES - ------------- Agriculture & Nutrition ...................................... $1,092 $1,231 $ 1,872 $ 2,001 Nylon Enterprise ............................................. 1,149 1,162 2,252 2,335 Performance Coatings & Polymers .............................. 1,656 1,190 2,806 2,338 Pharmaceuticals .......................................... 380 193 789 410 Pigments & Chemicals ......................................... 949 939 1,815 1,859 Polyester Enterprise ......................................... 667 759 1,291 1,493 Specialty Fibers ............................................. 857 828 1,720 1,679 Specialty Polymers ........................................... 1,072 1,055 2,074 2,089 Other ........................................................ 107 109 209 282 ------ ------ ------- ------- Total Segment Sales ...................................... 7,929 7,466 14,828 14,486 Elimination of Intersegment Transfers ........................ (234) (182) (407) (386) Elimination of Equity Affiliate Sales ........................ (701) (852) (1,132) (1,474) ------ ------ ------- ------- SALES .................................................... $6,994 $6,432 $13,289 $12,626 ====== ====== ======= ======= AFTER-TAX OPERATING INCOME (LOSS) - --------------------------------- Agriculture & Nutrition ...................................... $ 206 $ 236 $ 297 $ 265 Nylon Enterprise ............................................. 104 85 206 90 Performance Coatings & Polymers .............................. 160 128 260 250 Pharmaceuticals .............................................. 49 25 124 75 Pigments & Chemicals ......................................... 158 137 304 294 Polyester Enterprise ......................................... (53) 1 (59) 5 Specialty Fibers ............................................. 168 161 349 349 Specialty Polymers ........................................... 164 162 328 320 Other ........................................................ 12 (5) 22 40 ------ ------ ------- ------- Total Segment ATOI ....................................... 968 930 1,831 1,688 Interest & Exchange Gains and Losses ......................... (48) (82) (211) (152) Corporate Expenses ........................................... (74) (54) (146) (105) ------ ------ ------- ------- INCOME FROM CONTINUING OPERATIONS ........................ $ 846 $ 794 $ 1,474 $ 1,431 ====== ====== ======= =======
13 [FN] NOTES TO CONSOLIDATED SEGMENT INFORMATION - CONTINUING OPERATIONS - ----------------------------------------------------------------- Certain reclassifications of segment data have been made to reflect changes in organizational structure. Includes pro rata equity affiliate sales and intersegment transfers. The increase in sales reflects the current 100 percent ownership of the pharmaceuticals business versus 50 percent in 1998. In addition, effective first quarter 1999, revenues from contract manufacturing are reclassified from Other Income to Sales, and prior periods have been restated. These revenues are $21 and $48 for second quarter and year-to-date 1999, respectively, versus $20 and $35 for the comparable periods of 1998. Includes a charge of $60 for revision, based on finalization of the purchase price allocation in conjunction with the purchase of Protein Technologies International, related to the value assigned to research and development in progress at the time of purchase for which technological feasibility has not yet been established and no alternative future use is anticipated. Includes charges of $45 for the quarter and $130 for the year-to-date related to rationalization of global Nylon operations, primarily shutdown of certain manufacturing facilities and employee separation costs. Includes an estimated charge of $40 based on preliminary purchase price allocations in conjunction with the purchase of Herberts, the automotive coatings business of Hoechst AG, related to the value assigned to research and development in progress at the time of purchase for which technological feasibility has not yet been established and no alternative future use is anticipated. Includes a charge of $40 related to employee separation costs for about 850 employees within the Polyester Enterprise. Includes an exchange loss of $81 on forward exchange contracts purchased in 1998 to lock in the U.S. dollar cost of the acquisition of Herberts. The purchase price for Herberts was negotiated in German marks. 14 E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES
SEGMENT SALES VARIANCES (2ND QUARTER 1999 VS 2ND QUARTER 1998) - ------------------------------------------------------------------------------------------------------------------------- Sales Percentage Change Due to: Percent ----------------------------- Change Price Volume Other ------- ----- ------ -------- (%) (%) (%) (%) Agriculture & Nutrition .............................................. (11) 1 (12) Nylon Enterprise ..................................................... (1) (4) 3 Performance Coatings & Polymers ...................................... 39 (2) 5 36 Pharmaceuticals ...................................................... 97 N/A N/A 97 Pigments & Chemicals ................................................. 1 (1) 2 Polyester Enterprise ................................................. (12) (11) (1) Specialty Fibers ..................................................... 4 (5) 9 Specialty Polymers ................................................... 2 (4) 6 Other ................................................................ (2) N/A N/A (2) - ---------------- Includes sales increase/(decrease) due to acquisitions and divestitures. CONSOLIDATED SEGMENT INFORMATION EXCLUDING IMPACT OF NONRECURRING ITEMS - Three Months Ended Six Months Ended CONTINUING OPERATIONS June 30 June 30 - ------------------------------------------------------------------------------------------------------------------------ (Dollars in millions) 1999 1998 1999 1998 - ----------------------------------------------------------------------------------------------------------------------- AFTER-TAX OPERATING INCOME - -------------------------- Agriculture & Nutrition .............................................. $ 206 $236 $ 297 $ 325 Nylon Enterprise ..................................................... 104 130 206 220 Performance Coatings & Polymers ...................................... 160 128 300 250 Pharmaceuticals ...................................................... 49 25 124 75 Pigments & Chemicals ................................................. 158 137 304 294 Polyester Enterprise ................................................. (13) 1 (19) 5 Specialty Fibers ..................................................... 168 161 349 349 Specialty Polymers ................................................... 164 162 328 320 Other ................................................................ 12 (5) 22 40 ------ ---- ------ ------ Total Segment ATOI ................................................ 1,008 975 1,911 1,878 Interest & Exchange Gains and Losses ................................. (48) (82) (130) (152) Corporate Expenses ................................................... (74) (54) (146) (105) ------ ---- ------ ------ INCOME FROM CONTINUING OPERATIONS ................................. $ 886 $839 $1,635 $1,621 ====== ==== ====== ======
15 -----END PRIVACY-ENHANCED MESSAGE-----