-----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, JSxMgsIJyNiSA3msBAN4WKEbPMV3pNgBD7bsvPaTDztrBMLckN/llOoPvsIW64qJ ewiGfa2fvu7hPONk6QcNpQ== 0000912057-96-002326.txt : 19960216 0000912057-96-002326.hdr.sgml : 19960216 ACCESSION NUMBER: 0000912057-96-002326 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960205 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19960213 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: GRACE W R & CO /NY/ CENTRAL INDEX KEY: 0000042872 STANDARD INDUSTRIAL CLASSIFICATION: CHEMICALS & ALLIED PRODUCTS [2800] IRS NUMBER: 133461988 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-03720 FILM NUMBER: 96517175 BUSINESS ADDRESS: STREET 1: ONE TOWN CENTER RD CITY: BOCA RATON STATE: FL ZIP: 33486-1010 BUSINESS PHONE: 4073622000 FORMER COMPANY: FORMER CONFORMED NAME: GRACE W R & CO /CT/ DATE OF NAME CHANGE: 19900423 8-K 1 8-K 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): February 5, 1996 ---------------- W. R. GRACE & CO. ----------------------------------------------------------------- (Exact name of registrant as specified in its charter) New York 1-3720 13-3461988 - ----------------- ---------------------- --------------- (State or other (Commission File (IRS Employer jurisdiction of Number) Identification No.) incorporation) One Town Center Road, Boca Raton, Florida 33486-1010 ---------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 407/362-2000 ------------ Item 5. OTHER EVENTS. (a) On February 5, 1996, the Company announced its consolidated results of operations for the quarter and year ended December 31, 1995. The Company's February 5, 1996 press release and accompanying financial and statistical data are filed as an exhibit hereto and are incorporated by reference herein. (b) On February 12, 1996, the Company announced that National Medical Care, Inc. ("NMC"), the Company's principal health care subsidiary, has received a letter indicating that NMC is a target of a federal grand jury investigation. The Company's February 12, 1996 press release is filed as an exhibit hereto and is incorporated by reference herein. Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. The Company's February 5, 1996 press release and accompanying financial and statistical data are filed as an exhibit hereto. The Company's February 12 press release is filed as an exhibit hereto. -2- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed by the undersigned thereunto duly authorized. W. R. GRACE & CO. ------------------------------ (Registrant) By s/ Richard N. Sukenik ------------------------------ Richard N. Sukenik Vice President and Controller Dated: February 13, 1996 -3- W. R. GRACE & CO. Current Report on Form 8-K Exhibit Index ------------- Exhibit No. Description - ----------- ----------- 99.1 Press Release dated February 5, 1996 and accompanying financial and statistical data 99.2 Press Release dated February 12, 1996 EX-99.1 2 EX-99.1 EXHIBIT 99.1 #2631 CONTACT: Chuck Suits or Mary Lou Kromer 407/362-2600 or 800/GRACE99 GRACE FULL YEAR OPERATING EARNINGS PER SHARE RISE 11 PERCENT TO $3.33; FOURTH QUARTER DECLINES 14 PERCENT TO $.95; SPECIAL CHARGES IN QUARTER AMOUNT TO $566 MILLION AFTER TAX BOCA RATON, Fla., February 5, 1996 -- W. R. Grace & Co. (NYSE:GRA) reported net operating earnings per share of $3.33 for the full year 1995, an 11 percent increase from the $3.01 per share recorded for 1994. Including special items in both periods, Grace recorded a loss of $326 million, or $3.40 per share for the full year 1995, compared with net income of $83 million or 88 cents per share in 1994. Full year sales of specialty chemicals rose 14 percent to $3.67 billion compared to $3.22 billion in 1994. In discontinued operations, sales for health care rose 11 percent to $2.08 billion, compared to $1.88 billion a year ago. For the fourth quarter of 1995, net operating earnings were $.95 per share, a decline of 14 percent from the $1.10 per share earned in the 1994 quarter. In addition, the company recorded special charges of $566 million after tax in the quarter, related to discontinued operations, restructuring activities, asset impairments and future spending for asbestos litigation and environmental remediation. Including the special charges, Grace reported a net loss of $474 million, or $4.87 per share, for the fourth quarter of 1995. Sales for flexible packaging and specialty chemicals businesses in the fourth quarter declined one percent to $933 million compared to $944 million a year ago. (more) -2- Health care sales rose two percent to $541 million, compared to $529 million in the year-ago quarter. "The lower operating results in the recent quarter do not diminish our expectations for improved earnings and significantly higher shareholder value as we proceed through the year," said Albert J. Costello, chairman, president and chief executive officer. "As we noted in January, the shortfall in the fourth quarter was related to a number of factors, most of which appear to be temporary in nature. The agreement we announced yesterday to combine Grace's health care business with the dialysis operations of Fresenius AG will bring substantial benefits both to NMC and to Grace's packaging and specialty chemicals businesses. This transaction, anticipated for completion by the third quarter of 1996, will create the world's largest fully integrated dialysis company, with exciting prospects for value-driven growth and continued leadership in quality of patient care," he said. "This transaction, combined with an expected transaction involving our Grace Dearborn water treatment business, will result in a significant reduction of Grace's debt, and more than restore the shareholders' equity impacted by the special charges taken in the fourth quarter. Execution of the stock repurchase program will further enhance per share results. In all, we will move significantly closer to attaining our goal of stronger, more predictable and sustainable growth in value," Mr. Costello concluded. In 1995, pretax operating earnings for flexible packaging and specialty chemicals rose 15 percent to $387 million, representing an all-time record for the group. This increase was achieved despite a 17 percent decline to $107 million in the fourth quarter. As previously reported, fourth quarter results included four fewer selling days (more) -3- than in the year-ago quarter due to a change in the reporting calendar made at the start of 1995. This had a volume impact of six percent. - - Packaging had a record year, with sales rising 19 percent to $1.7 billion versus 1994; operating earnings rose 20 percent. Packaging earnings for the quarter declined three percent, excluding the impact of fewer selling days. Underlying product strength was more than offset by a number of factors, primarily the three-week French strike which ended in December, temporary weakness in U.S. meat markets, and increased costs resulting from new line start-up activity and reduction in inventory levels. - - Catalyst and silica products also had a record year, with sales of $687 million, up 13 percent versus 1994; operating earnings rose 18 percent. Results for the quarter were mixed, excluding the change in selling days. Fluid cracking catalysts were down compared to an exceptionally strong year-ago quarter, primarily as a result of refineries continuing to process light crude oils. Silicas and adsorbents also declined due to several factors, while polyolefin catalysts rose due to strong volume and favorable costs. - - The smaller specialty chemicals businesses recorded 8 percent revenue gains for full year 1995 to $1.3 billion, while their earnings declined 22 percent. For the fourth quarter, construction products earnings rose modestly versus the year-ago quarter, primarily due to strength in cement and concrete products and lower costs. Results for both water treatment and container products declined, primarily due to continued high operating costs and the inability to raise prices. (more) -4- Pretax operating earnings from health care declined eight percent in the quarter due to the absence of 1994 sales and related earnings associated with the 1993 federal budget ("OBRA 93") that are no longer being recorded. Absent the beneficial OBRA 93 impact in the 1994 quarter, current quarter revenues rose nine percent and operating income increased 27 percent. Strong increases in dialysis services and medical products were partly offset by a decline in the homecare division due to price competition in its base infusion business. During the fourth quarter, the company updated analyses of certain contingencies. Based on recent trends and reassessment of future plans and forecasts, provisions aggregating $566 million after tax were made as follows: - - Discontinued Operations - Health Care - $69 million - For cumulative adjustments related to changing the method of recording certain billing adjustments, the recognition of a greater than forecasted actual experience rate for certain self insurance liabilities and changes in the amortization rates of certain intangible assets. - - Other Discontinued Operations - $151 million - To reflect lower than expected net proceeds from planned disposition of the remaining discontinued operations, principally Grace Cocoa. - - Asbestos - $179 million - Principally for a first-time estimate of future bodily injury claims, updated estimates of pending property damage and bodily injury cases, and related insurance recovery estimates. - - Environmental - $50 million - For additional future spending for several sites. (more) -5- - - Restructuring, Asset Impairment and Other Costs - $117 million - To recognize costs of the previously-announced worldwide restructuring program along with certain asset impairments (as prescribed under a new accounting pronouncement - FASB No. 121 - Accounting for the impairment of long-lived assets) and other special costs, some of which related to previous divestments. Grace is a leading global supplier of flexible packaging and specialty chemicals, and a leading provider of specialized health care services. -0- W. R. Grace & Co. Consolidated Statement of Operations (a) For Year Ended December 31 -------------------------- ($ Millions Except Per Share)
Fourth Quarter Full Year ---------------------------- ---------------------------- 1995 1994 1995 1994 ------------ ------------ ------------ ------------ Sales $ 933.4 $ 944.4 $ 3,665.5 $ 3,218.2 Other income 28.6 4.4 41.9 42.6 ------------ ------------ ------------ ------------ Total $ 962.0 $ 948.8 $ 3,707.4 $ 3,260.8 ------------ ------------ ------------ ------------ Cost of goods sold and operating expenses $ 629.6 $ 523.5 $ 2,247.2 $ 1,900.8 Selling, general and administrative expenses 243.9 227.2 910.8 773.6 Depreciation and amortization 54.6 51.0 177.6 165.0 Interest expense and related financing costs 19.0 13.1 71.3 49.5 Research and development expenses 30.6 24.0 120.6 106.8 Corporate expenses previously allocated to the health care segment 7.8 9.7 37.8 37.1 Restructuring costs and asset impairments 135.2 - 179.5 - Provision relating to asbestos-related liabilities and insurance coverage 275.0 - 275.0 316.0 ------------ ------------ ------------ ------------ Total $ 1,395.7 $ 848.5 $ 4,019.8 $ 3,348.8 ------------ ------------ ------------ ------------ (Loss)/Income Before Income Taxes $ (433.7) $ 100.3 $ (312.4) $ (88.0) (Benefit from)/provision for income taxes (149.4) 35.4 (115.8) (46.6) ------------ ------------ ------------ ------------ (Loss)/income from continuing operations $ (284.3) $ 64.9 $ (196.6) $ (41.4) (Loss)/income from discontinued operations (189.5) 38.5 (129.3) 124.7 ------------ ------------ ------------ ------------ Net (loss)/income $ (473.8) $ 103.4 $ (325.9) $ 83.3 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ (LOSS)/EARNINGS PER SHARE Continuing operations $ (2.92)(b) $ .69 $ (2.05)(b) $ (.45)(e) Discontinued operations (1.95)(c) .41 (1.35)(c) 1.33 ------------ ------------ ------------ ------------ Net (loss)/income $ (4.87)(d) $ 1.10 $ (3.40)(d) $ .88(e) ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ Average number of shares (millions) 97.3 94.0 95.8 93.9
(a) 1994 results have been restated to reflect the classification of the health care segment as a discontinued operation in the second quarter of 1995. (b) Includes losses from special items of $3.55 per share (or $345.6 after-tax) and $4.08 per share (or $391.3 after- tax) for the fourth quarter and full year 1995, respectively. (c) Includes losses from special items of $2.27 per share (or $220.2 after- tax) and $2.65 per share (or $253.7 after- tax) for the fourth quarter and full year 1995, respectively. (d) Includes losses from special items of $5.82 per share (or $565.8 after- tax) and $6.73 per share (or $645.0 after- tax) for the fourth quarter and full year 1995, respectively. (e) Includes $2.13 per share for the 2nd quarter 1994 provision relating to asbestos-related insurance coverage. W. R. Grace & Co. Operating Results Quarter Ended December 31 ------------------------- ($ Millions Except Per Share)
PERCENT 1995 1994 CHANGE -------- -------- ---------- Sales - Specialty Chemicals $ 933.4 $ 944.4 (1.2)% Operating Income - Specialty Chemicals $ 107.0 $ 128.1 (16.5) Other Expenses / (Income): Interest/Financing (a) $ 19.0 $ 13.1 45.0 Other (13.8) 5.0 (376.0) -------- -------- Total Other Expenses $ 5.2 $ 18.1 (71.3) Pretax Operating Earnings $ 101.8 $ 110.0 (7.5) Corporate Expenses previously allocated To Health Care 7.8 9.7 (19.6) -------- -------- Pretax Operating Earnings before Special Items $ 94.0 $ 100.3 (6.3) Provision for Income Taxes 32.7 35.4 (7.6) -------- -------- Net Operating Income before Special Items $ 61.3 $ 64.9 (5.5) Special Items - after-tax - Chemicals / Corporate: Restructuring/Other Activities (116.9) - ND Provision for Environmental Liabilities (50.0) - ND Provision for Asbestos-related Liabilities (178.7) - ND -------- -------- Net (Loss)/Income from Continuing Operations $ (284.3) $ 64.9 (538.1) Net Loss from Disc. Ops. (after-tax excl. Health Care) (151.3) - ND Net (Loss)/Income from Discontinued Operations - Health Care (b) (38.2) 38.5 (199.2) -------- -------- Net (Loss)/Income $ (473.8) $ 103.4 (558.2)% -------- -------- -------- -------- - ----------------------------------------------------------------------------------------- EARNINGS PER SHARE - OPERATING EARNINGS (BEFORE SPECIAL ITEMS) From Operations - Specialty Chemicals $ .63 $ .69 (8.7)% From Discontinued Operations - Health Care (b) .32 .41 (22.0) -------- -------- Operating Earnings $ .95 $ 1.10 (13.6)% -------- -------- -------- -------- - ----------------------------------------------------------------------------------------- (LOSS)/EARNINGS PER SHARE From Continuing Operations $ (2.92) $ .69 (523.5)% From Discontinued Operations (1.95) .41 (575.6) -------- -------- Net (Loss)/Income $ (4.87) $ 1.10 (542.7)% -------- -------- -------- -------- Average Number of Shares (Millions) 97.3 94.0 (a) After an allocation of interest/financing expenses to discontinued operations. (b) DISCONTINUED OPERATIONS - HEALTH CARE Sales $ 540.6 $ 528.5 2.3 % Operating Income $ 83.6 $ 90.9 (8.0) Interest/Financing Expenses 28.8 20.9 37.8 -------- -------- Pretax Operating Earnings 54.8 70.0 (21.7) Provision for Income Taxes 24.1 31.5 (23.5) -------- -------- Net Income from Discontinued Oper. before Special Items $ 30.7 $ 38.5 (20.3)% Special Items - after-tax (68.9) - ND -------- -------- Net (Loss)/Income from Discontinued Operations $ (38.2) $ 38.5 (199.2)% -------- -------- -------- --------
W. R. Grace & Co. Operating Results Year Ended December 31 ---------------------- ($ Millions Except Per Share)
PERCENT 1995 1994 CHANGE -------------- ------------- --------- Sales - Specialty Chemicals $ 3,665.5 $ 3,218.2 13.9 % Operating Income - Specialty Chemicals $ 387.4 $ 336.5 15.1 Other Expenses: Interest/Financing (a) $ 71.3 $ 49.5 44.0 Other (11.3) 8.9 (227.0) -------------- ------------- Total Other Expenses $ 60.0 $ 58.4 2.7 Pretax Operating Earnings $ 327.4 $ 278.1 17.7 Corporate Expenses previously allocated to Health Care 37.8 37.1 1.9 -------------- ------------- Pretax Operating Earnings before Special Items $ 289.6 $ 241.0 20.2 Provision for Income Taxes 94.9 83.4 13.8 -------------- ------------- Net Operating Income before Special Items $ 194.7 $ 157.6 23.5 Special Items - after-tax - Chemicals / Corporate: Provision for Corporate Governance (18.6) - ND Gain on Sale of Interest in REG - 27.0 (100.0) Prov. for Environ. Costs/Staffing Reductions - (26.0) 100.0 Restructuring/Other Activities (144.0) - ND Provision for Environmental Liabilities (50.0) - ND Provision for Asbestos-related Liabilities (178.7) (200.0) 10.7 -------------- ------------- Net Loss from Continuing Operations $ (196.6) $ (41.4) (375.0) Net Loss from Disc. Ops. (after-tax excl. Health Care) (151.3) - ND Net Income from Discontinued Operations - Health Care (b) 22.0 124.7 (82.4) -------------- ------------- Net (Loss) / Income $ (325.9) $ 83.3 (491.2)% -------------- ------------- -------------- ------------- - ------------------------------------------------------------------------------------------------------------------------------ EARNINGS PER SHARE - OPERATING EARNINGS (BEFORE SPECIAL ITEMS) From Operations - Specialty Chemicals $ 2.03 $ 1.68 20.8 % From Discontinued Operations - Health Care (b) 1.30 1.33 (2.3) -------------- ------------- Operating Earnings $ 3.33 $ 3.01 10.6 % -------------- ------------- -------------- ------------- - ------------------------------------------------------------------------------------------------------------------------------ (LOSS) / EARNINGS PER SHARE From Continuing Operations $ (2.05) $ (.45) (355.6)% From Discontinued Operations (1.35) 1.33 (201.5) -------------- ------------- Net (Loss) / Income $ (3.40) $ .88 (486.4)% -------------- ------------- -------------- ------------- Average Number of Shares (Millions) 95.8 93.9 (a) After an allocation of interest/financing expenses to discontinued operations. (b) DISCONTINUED OPERATIONS - HEALTH CARE Sales $ 2,076.8 $ 1,875.1 10.8 % Operating Income $ 315.6 $ 287.5 9.8 Interest/Financing Expenses 93.5 60.4 54.8 -------------- ------------- Pretax Operating Earnings 222.1 227.1 (2.2) Provision for Income Taxes 97.7 102.4 (4.6) -------------- ------------- Net Income from Discontinued Oper. before Special Items $ 124.4 $ 124.7 (0.2)% Special Items - after-tax (102.4) - ND -------------- ------------- Net Income from Discontinued Operations $ 22.0 $ 124.7 (82.4)% -------------- ------------- -------------- -------------
W. R. Grace & Co. Specialty Chemicals Supplemental Data 1995 Sales and Percent Change Versus Prior Period ------------------------------------------------- (Dollars In Millions)
QUARTER ENDED DECEMBER 31 - -------------------------- Amount of Inc/(Dec) Due to: --------------------------------------------- Sales ------------------------- Price/ 1995 (a) 1994 Vol. Mix Exch. Total ---------- ------------ --------- -------- -------- ------- Packaging $ 440.6 $ 436.6 (3)% 3 % 1 % 1 % Catalysts/Silicas 175.5 175.4 (7) 5 2 - Construction 101.0 108.6 (7) - - (7) Container 84.0 88.1 (4) (2) 1 (5) Water Treatment 98.5 100.7 (5) 1 2 (2) Other 33.8 35.0 (18) 11 3 (4) ---------- ------------ Total $ 933.4 $ 944.4 (5)% 3 % 1 % (1)% ---------- ------------ ---------- ------------ YEAR ENDED DECEMBER 31 - ---------------------- Amount of Inc/(Dec) Due to: --------------------------------------------- Sales ------------------------- Price/ 1995 (a) 1994 Vol. Mix Exch. Total ---------- ------------ --------- -------- -------- ------- Packaging $ 1,692.1 $ 1,417.5 10 % 6 % 3 % 19 % Catalysts/Silicas 687.3 609.7 4 5 4 13 Construction 397.2 387.1 1 1 1 3 Container 357.4 324.5 5 - 5 10 Water Treatment 398.5 363.4 5 2 3 10 Other 133.0 116.0 4 8 3 15 ---------- ------------ Total $ 3,665.5 $ 3,218.2 7 % 4 % 3 % 14 % ---------- ------------ ---------- ------------
(a) Specialty Chemicals' reporting calendar was adjusted to a month-end reporting basis in 1995. This resulted in approximately four less selling days in the fourth quarter of 1995 as compared to 1994. W. R. Grace & Co. Specialty Chemicals Geographic Data --------------- (Dollars In Millions)
QUARTER ENDED DECEMBER 31 - ------------------------- Pretax Sales Operating Income --------------------------- -------------------------- 1995 1994 1995 1994 ---------- ---------- ---------- ---------- SPECIALTY CHEMICALS North America $ 459 $ 479 $ 62 $ 69 Europe 291 284 21 33 (a) Latin America 66 68 7 8 Asia Pacific 118 113 17 18 ---------- ---------- ---------- ---------- Total Specialty Chemicals $ 934 $ 944 $ 107 $ 128 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- YEAR ENDED DECEMBER 31 - ---------------------- Pretax Sales Operating Income --------------------------- -------------------------- 1995 1994 1995 1994 ---------- ---------- ---------- ---------- SPECIALTY CHEMICALS North America $ 1,821 $ 1,679 $ 208 $ 192 Europe 1,147 955 96 69 (a) Latin America 253 218 18 20 Asia Pacific 445 366 65 56 ---------- ---------- ---------- ---------- Total Specialty Chemicals $ 3,666 $ 3,218 $ 387 $ 337 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
(a) Includes costs of $1 for the quarter and $11 year-to-date associated with streamlining certain European chemical operations. EX-99.2 3 EXHIBIT 99.2 Exhibit 99.2 #2632 CONTACT: Chuck Suits or Mary Lou Kromer 407/362-2600 or 800/GRACE99 GRACE REPORTS NMC IS TARGET OF FEDERAL INVESTIGATION; WILL HAVE NO IMPACT ON NMC-FRESENIUS TRANSACTION BOCA RATON, Fla., February 12, 1996- -W. R. Grace & Co. (NYSE: GRA) today reported that National Medical Care, Inc. (NMC), Grace's principal health care subsidiary, has received a letter from the United States Attorney for the District of New Jersey indicating that NMC is a target of a federal grand jury investigation into possible violations of criminal law in connection with NMC's efforts to persuade the U.S. Food and Drug Administration to lift a January 1991 import hold issued with respect to NMC's Dublin, Ireland manufacturing facility. The material element of the import hold was lifted in 1992. The target letter relates to the previously disclosed investigation of NMC by a federal grand jury in New Jersey. Grace stated that the target letter will not have an impact on the recently announced transaction involving NMC and Fresenius AG, and that the outcome of the investigation will not have a material impact on NMC. Grace is a leading global supplier of flexible packaging and specialty chemicals, and a leading provider of specialized health care services. ### -----END PRIVACY-ENHANCED MESSAGE-----