-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, AdWd52mD+HhQeS5kETyvI+bff4+U8gVFz9FVe6exscn24sDUwHyQv+v6qF9KEnAy Wl69T1s5z9EaQ2U9k+1F0Q== 0000049826-95-000002.txt : 19950516 0000049826-95-000002.hdr.sgml : 19950516 ACCESSION NUMBER: 0000049826-95-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950515 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ILLINOIS TOOL WORKS INC CENTRAL INDEX KEY: 0000049826 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS PRODUCTS, NEC [3089] IRS NUMBER: 361258310 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-04797 FILM NUMBER: 95539737 BUSINESS ADDRESS: STREET 1: 3600 W LAKE AVE CITY: GLENVIEW STATE: IL ZIP: 60025 BUSINESS PHONE: 7087247500 MAIL ADDRESS: STREET 1: 3600 WEST LAKE AVENUE CITY: GLENVIEW STATE: IL ZIP: 60025-5811 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1995 ---------------------------------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ------------------- ------------------- Commission file number 1-4797 --------------------------- ILLINOIS TOOL WORKS INC. ---------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 36-1258310 -------------------------------------------- ----------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 3600 West Lake Avenue, Glenview, IL 60025-5811 -------------------------------------------- ---------------------- (Address of principal executive offices) (Zip Code) (Registrant's telephone number, including area code) (708) 724-7500 ----------------- Former address: ---------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report.) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X . No . ------ ------ The number of shares of registrant's common stock, without par value, outstanding at April 30, 1995: 114,154,541. -1- Part I - Financial Information ------------------------------ Item 1 ------ ILLINOIS TOOL WORKS INC. and SUBSIDIARIES ----------------------------------------- FINANCIAL STATEMENTS -------------------- The unaudited financial statements included herein have been prepared by Illinois Tool Works Inc. and Subsidiaries (the "Company"). In the opinion of management, the interim financial statements reflect all adjustments of a normal recurring nature necessary for a fair statement of the results for interim periods. It is suggested that these financial statements be read in conjunction with the financial statements and comments on financial statements included in the Company's Annual Report on Form 10-K. -2- ILLINOIS TOOL WORKS INC. and SUBSIDIARIES ----------------------------------------- STATEMENT OF INCOME ------------------- (UNAUDITED) ----------- (In Thousands Except for Per Share Amounts) Three Months Ended March 31 ------------------ 1995 1994 -------- -------- Operating Revenues $929,085 $771,439 Operating costs 616,022 520,264 Selling, administrative, and research and develop- ment expenses 173,875 154,366 Amortization of goodwill and other intangible assets 6,133 5,493 -------- -------- Operating Income 133,055 91,316 Interest expense (6,159) (7,536) Amortization of retiree health care (1,742) (1,742) Other income (expense) (4,123) 750 -------- -------- Income Before Income Taxes 121,031 82,788 Income taxes 46,000 31,873 -------- -------- Net Income $ 75,031 $ 50,915 ======== ======== Per share of common stock: Net Income $ .66 $ .45 ===== ===== Cash dividends: Paid $ .15 $ .13 ===== ===== Declared $ .15 $ .13 ===== ===== Average number of shares of common stock outstanding during the period 114,032 113,200 ======= ======= - -3- ILLINOIS TOOL WORKS INC. and SUBSIDIARIES ----------------------------------------- STATEMENT OF FINANCIAL POSITION ------------------------------- (UNAUDITED) --------- (In Thousands) ASSETS March 31, 1995 December 31, 1994 - ------ -------------- ----------------- Current Assets: Cash and equivalents $ 118,712 $ 76,867 Trade receivables 644,938 612,638 Inventories 465,961 439,486 Deferred income taxes 76,541 72,728 Prepaid expenses and other current assets 63,155 61,214 ---------- ---------- Total current assets 1,369,307 1,262,933 ---------- ---------- Plant and Equipment: Land 67,029 66,577 Buildings 318,994 317,714 Machinery and equipment 934,997 915,198 Equipment leased to others 69,175 69,162 Construction in progress 41,846 32,143 ---------- ---------- 1,432,041 1,400,794 Accumulated depreciation (787,959) (759,559) ---------- ---------- Net plant and equipment 644,082 641,235 ---------- ---------- Investment in Leveraged Leases 54,012 55,413 Goodwill 380,143 394,233 Deferred Income Taxes 38,292 -- Other Assets 267,379 226,684 ---------- ---------- $2,753,215 $2,580,498 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY - ------------------------------------ Current Liabilities: Short-term debt $ 69,023 $ 67,002 Accounts payable 174,148 174,748 Accrued expenses 343,927 317,031 Cash dividends payable 17,117 17,094 Income taxes payable 65,718 52,558 ---------- ---------- Total current liabilities 669,933 628,433 ---------- ---------- Non-current Liabilities: Long-term debt 272,014 272,987 Deferred income taxes -- 69,516 Other 200,615 68,041 ---------- ---------- Total non-current liabilities 472,629 410,544 ---------- ---------- Stockholders' Equity: Preferred stock -- -- Common stock 203,810 201,166 Income reinvested in the business 1,402,086 1,344,172 Common stock held in treasury (1,866) (1,952) Equity adjustment from foreign currency translation 6,623 (1,865) ---------- ---------- Total stockholders' equity 1,610,653 1,541,521 ---------- ---------- $2,753,215 $2,580,498 ========== ========== - -4- ILLINOIS TOOL WORKS INC. and SUBSIDIARIES ----------------------------------------- STATEMENT OF CASH FLOWS ----------------------- (UNAUDITED) --------- (In Thousands) Three Months Ended March 31 __________________ 1995 1994 -------- -------- Cash Provided by (Used for) Operating Activities: Net income $ 75,031 $ 50,915 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 38,400 33,743 Change in deferred income taxes (896) (1,145) Gain on sale of plant and equipment, and equipment under a leveraged lease (3,014) (1,968) (Income) loss from investment properties (2,588) 166 Gain on sale of operations and affiliates (120) (447) Other non-cash items, net 14,628 2,577 -------- -------- Cash provided by operating activities 121,441 83,841 Changes in assets and liabilities: (Increase) decrease in-- Trade receivables (25,478) (32,867) Inventories (21,480) (18,021) Prepaid expenses and other assets (7,246) (1,754) Increase (decrease) in-- Accounts payable (3,115) (1,369) Accrued expenses 1,286 15,059 Income taxes payable 13,346 12,541 Other, net (124) 4,344 -------- -------- Net cash provided by operating activities 78,630 61,774 -------- -------- Cash Provided by (Used for) Investing Activities: Acquisition of subsidiaries (excluding cash and equivalents) and additional interest in affiliates (5,892) (4,716) Additions to plant and equipment (35,715) (27,835) Proceeds from sale of plant and equipment, investment properties, and equipment under a leveraged lease 11,032 7,518 Proceeds from sale of operations and affiliates 1,344 p1,760 Other, net 6,237 168 -------- -------- Net cash used for investing activities (22,994) (23,105) -------- -------- Cash Provided by (Used for) Financing Activities: Cash dividends paid (17,094) (14,716) Issuance of common stock 2,730 1,828 Repayments of short-term debt (1,239) (20,335) Proceeds from long-term debt -- 217 Repayments of long-term debt (456) (213) -------- -------- Net cash used for financing activities (16,059) (33,219) -------- -------- Effect of Exchange Rate Changes on Cash and Equivalents 2,268 (2,661) -------- -------- Cash and Equivalents: Increase during the period 41,845 2,789 Beginning of period 76,867 35,395 -------- -------- End of the period $118,712 $ 38,184 ======== ======== Cash Paid During the Period for Interest $ 5,538 $ 7,133 ======== ======== Cash Paid During the Period for Income Taxes $ 32,383 $ 23,554 ======== ======== Liabilities Assumed from Acquisitions $ 3,200 $ -- ======== ======== - -5- ILLINOIS TOOL WORKS INC. and SUBSIDIARIES ----------------------------------------- COMMENTS ON FINANCIAL STATEMENTS -------------------------------- (UNAUDITED) --------- (1) OTHER INCOME (EXPENSE), consists of the following: --------------------- (In Thousands) Three Months Ended March 31 ------------------ 1995 1994 -------- ------- Interest income $ 2,358 $ 876 Income from unconsolidated affiliates 112 355 Net reserves for disposition, relocation and reorganization of certain facilities, revaluation of non-operating assets to realizable value, and nonrecurring costs unrelated to operations (11,461) (2,027) Income (loss) from investment properties 2,588 (166) Gain on sale of operations and affiliates 120 447 Gain on sale of equipment under a leveraged lease 3,996 -- Gain (loss) on sale of plant and equipment (982) 1,968 Other, net (854) (703) -------- ------- $ (4,123) $ 750 ======== ======= - -6- (2) INVENTORIES at March 31, 1995 and December 31, 1994 were as ----------- follows: (In Thousands) March 31, Dec. 31, 1995 1994 -------- -------- Raw Material $116,017 $126,730 Work-in-process 75,595 66,505 Finished goods 274,349 246,251 -------- -------- $465,961 $439,486 ======== ======== (3) NONCASH TRANSACTION: ------------------- In the first quarter of 1995, the Company exchanged a minority interest in a subsidiary for certain investments in debt securities. This transaction, along with the associated tax effects, has not been reflected in the Statement of Cash Flows, as it had no cash impact. -7- Item 2 - Management's Discussion and Analysis - --------------------------------------------- ENGINEERED COMPONENTS SEGMENT - ----------------------------- Businesses in this segment manufacture short lead-time plastic and metal components, fasteners and assemblies; industrial fluids and adhesives; fastening tools and welding equipment. This segment primarily serves the construction, automotive and general industrial markets. (Dollars in millions) Three months ended March 31 ------------------ Operating Revenues 1995 1994 - --------- -------- -------- Domestic $329 $283 International 171 128 ---- ---- Total $500 $411 ==== ==== Three months ended March 31 ------------------------------ Operating 1995 1994 Income Income Margin Income Margin - --------- ------ ------ ------ ------ Domestic $54 16.4 % $40 14.1 % International 20 11.7 11 8.6 --- --- Total $74 14.8 $51 12.4 === === Domestic revenues, operating income and margins increased compared with last year primarily due to the Miller operations, followed by the construction businesses. Both benefited from a steady U.S. economy and new product introductions. Automotive businesses also contributed to the improved financial results, although growth has decelerated slightly due to the slow down in domestic car builds. Internationally, revenues increased compared with 1994 revenues largely due to increased penetration in a growing European automotive market. Construction businesses also contributed to revenue growth as a result of focused marketing supported by an improving European construction market. Operating income and margins increased compared with last year due to increased volume in the automotive and construction businesses and continued cost cutting efforts. - -8- INDUSTRIAL SYSTEMS AND CONSUMABLES SEGMENT - ------------------------------------------ Businesses in this segment manufacture longer lead-time systems and related consumables for consumer and industrial packaging, industrial spray coating equipment and systems, and quality assurance application equipment and systems. The largest markets served by this segment are general industrial, food and beverage, and industrial capital goods. (Dollars in millions) Three months ended March 31 ----------------------------- Operating Revenues 1995 1994 - --------- -------- -------- Domestic $269 $229 160 131 International ---- ---- $429 $360 Total ==== ==== Three months ended March 31 ----------------------------- Operating 1995 1994 Income Income Margin Income Margin - --------- ------ ------ ------ ------ Domestic $45 16.7 % $32 14.0 % International 14 8.8 8 6.1 --- --- Total $59 13.8 $40 11.1 === === Domestic revenues increased over last year primarily due to new product introductions and strong demand in the industrial packaging and finishing systems businesses. Consumer packaging businesses also contributed to the increase in revenues because of improved performance in the beverage and food markets along with the purchase of the remaining portion of a joint venture. Operating income and margins increased due to volume gains in the industrial packaging and finishing systems businesses. International revenues increased due largely to the industrial packaging businesses which are benefiting from an improving European economy. Consumer packaging businesses contributed to the revenue growth for the same reasons stated above. The increase in European revenues in the finishing systems businesses were offset by declines in the Japanese and the UK operations. New product introductions continued to allow finishing systems businesses to gain market share. Operating income and margins increased due to volume gains and cost reductions in industrial packaging businesses along with new products in the finishing systems businesses. - -9- OPERATING EXPENSES - ------------------ Operating costs as a percentage of revenues decreased to 66.3% in the first quarter of 1995 versus 67.4% in the first quarter of 1994. Selling, administrative, and research and development expenses were 18.7% of revenues in the first quarter of 1995 versus 20.0% in the first quarter of 1994. These ratios were lower because of cost reductions as a result of a Company- wide objective to reduce costs. INTEREST EXPENSE - ---------------- Interest expense declined to $6.2 million in the first quarter of 1995 from $7.5 million in the first quarter of 1994, primarily due to a reduction in commercial paper borrowings. OTHER INCOME (EXPENSE) - ---------------------- Other income (expense) increased to net other expense of $4.1 million in the first quarter of 1995 from net other income of $.8 million in the first quarter of 1994. The increase in expense is mainly due to nonrecurring costs unrelated to operations, partially offset by a gain on the sale of equipment under a leveraged lease and an increase in interest income. NET INCOME - ---------- Net income of $75.0 million ($0.66 per share) in the first quarter of 1995 was 47.4% higher than the 1994 first quarter net income of $50.9 million ($0.45 per share). Foreign currency had no material impact on earnings in the first quarter of 1995 versus 1994. - -10- FINANCIAL POSITION - ------------------ Net working capital at March 31, 1995 and December 31, 1994 is summarized as follows: (Dollars in Thousands) March 31, Dec. 31, 1995 1994 Increase ---------- ---------- ---------- Current Assets: Cash and equivalents $ 118,712 $ 76,867 $ 41,845 Trade receivables 644,938 612,638 32,300 Inventories 465,961 439,486 26,475 Other 139,696 133,942 5,754 ---------- ---------- ---------- $1,369,307 $1,262,933 $ 106,374 ---------- ---------- ---------- Current Liabilities: Short-term debt $ 69,023 $ 67,002 $ 2,021 Accounts payable and accrued expenses 518,075 491,779 26,296 Other 82,835 69,652 13,183 ---------- ---------- ---------- $ 669,933 $ 628,433 $ 41,500 ---------- ---------- ---------- Net Working Capital $ 699,374 $ 634,500 $ 64,874 ========== ========== ========== Current Ratio 2.04 2.01 ========== ========== The increase in cash and equivalents in the first quarter of 1995 was primarily due to an increase in cash generated from operations. Trade receivables increased primarily due to seasonally stronger domestic revenues in the first quarter of 1995 versus the fourth quarter of 1994. - -11- Part II - Other Information - --------------------------- Item 6 - Exhibits and Reports on Form 8-K - ----------------------------------------- (a) Exhibit Index Exhibit No. Description ----------- ----------------------- 27 Financial Data Schedule (b) Reports on Form 8-K No reports on Form 8-K have been filed during the quarter for which this report is filed. - -12- SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of l934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ILLINOIS TOOL WORKS INC. Dated: May 12, 1995 By: /s/ Michael W. Gregg ------------------------ --------------------------------------- Michael W. Gregg, Senior Vice President and Controller, Accounting (Principal Accounting Officer) Dated: May 12, 1995 By: /s/ Stewart S. Hudnut ------------------------ --------------------------------------- Stewart S. Hudnut, Senior Vice President, General Counsel and Secretary - -13- EX-27 2
5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE STATEMENT OF INCOME (UNAUDITED) AND THE STATEMENT OF FINANCIAL POSITION (UNAUDITED) AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS DEC-31-1995 JAN-01-1995 MAR-31-1995 118,712 0 644,938 0 465,961 1,369,307 1,432,041 787,959 2,753,215 669,933 272,014 203,810 0 0 1,406,843 2,753,215 929,085 929,085 616,022 616,022 6,133 0 6,159 121,031 46,000 75,031 0 0 0 75,031 .66 .66
-----END PRIVACY-ENHANCED MESSAGE-----