Attached files
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| 8-K - FORM 8-K - ROCKWELL AUTOMATION, INC | d286908d8k.htm |
Exhibit 99
1201 S. Second Street
Milwaukee, WI 53204
USA
Fax: 414.382.5560
News Release
| Contact |
John Bernaden Media Relations Rockwell Automation 414.382.2555 |
Rondi Rohr-Dralle Investor Relations Rockwell Automation 414.382.8510 |
Rockwell Automation Reports First Quarter 2012 Results and Reaffirms Guidance
| • | Sales of $1.5 billion, up 8 percent year over year |
| • | Diluted EPS up 22 percent to $1.27 |
| • | Company reaffirms guidance for fiscal 2012 EPS of $5.05—$5.45 |
MILWAUKEE (January 25, 2012) – Rockwell Automation, Inc. (NYSE: ROK) today reported fiscal 2012 first quarter sales of $1,473.9 million, up 8 percent from $1,365.8 million in the first quarter of fiscal 2011. Acquisitions contributed 1 percentage point to the increase and currency translation reduced sales by 1 percentage point. Net income was $183.3 million ($1.27 per share) compared to $150.1 million ($1.04 per share) last year, an increase of 22 percent on a per-share basis.
Total segment operating earnings were $283.8 million in the first quarter of fiscal 2012, up from $222.0 million in the same period of 2011. Total segment operating margin increased to 19.3 percent from 16.3 percent a year ago primarily due to volume leverage.
Free cash flow was a use of cash of $210.8 million in the first quarter of fiscal 2012 after a discretionary pre-tax contribution of $300 million to the company’s U.S. pension trust and payouts of performance-based compensation earned in fiscal 2011. Return on invested capital was 31.5 percent.
Organic sales, total segment operating earnings, total segment operating margin, free cash flow and return on invested capital are non-GAAP measures that are reconciled to GAAP measures in the attachments to this release.
Commenting on the results, Keith D. Nosbusch, chairman and chief executive officer, said, “We had great earnings growth on good sales growth in the quarter. Segment margins expanded and EPS growth of 22 percent was very strong. Regional sales growth rates varied, particularly in the solutions businesses. Process had a great quarter with 22 percent sales growth. In this macroeconomic environment, I am pleased with the solid start to the fiscal year.”
Outlook
Commenting on the outlook, Nosbusch added, “With one quarter behind us, and given our current assessment of global economic and market conditions, we are not changing our sales outlook for the year. Based on fiscal 2012 projected sales of $6.2 billion to $6.5 billion, we are reaffirming our fiscal 2012 earnings per share guidance of $5.05 to $5.45. Although we may see uneven results throughout the year, sales and earnings in our guidance range would represent another record year for the company.”
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Following is a discussion of first quarter results for both segments.
Architecture & Software
Architecture & Software fiscal 2012 first quarter sales were $650.5 million, an increase of 6 percent from $613.9 million last year. Currency translation reduced sales by 1 percentage point. Segment operating earnings were $186.3 million in the first quarter of fiscal 2012, compared to $153.1 million in 2011. Segment operating margin was 28.6 percent in the first quarter of fiscal 2012, compared to 24.9 percent a year ago.
Control Products & Solutions
Control Products & Solutions fiscal 2012 first quarter sales were $823.4 million, an increase of 10 percent from $751.9 million last year. Acquisitions contributed 2 percentage points to the increase and currency translation reduced sales by 1 percentage point. Fiscal 2012 first quarter sales were down 15 percent sequentially from the fourth quarter of fiscal 2011. Segment operating earnings increased to $97.5 million in the first quarter of fiscal 2012, compared to $68.9 million in 2011. Segment operating margin was 11.8 percent in the first quarter of fiscal 2012, compared to 9.2 percent a year ago.
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Other Information
Fiscal 2012 first quarter general corporate net expense was $20.9 million, compared to $15.7 million in 2011. General corporate net expense in the prior year was lower primarily due to a gain on the sale of an investment.
The effective tax rate for the first quarter of fiscal 2012 was 24.5 percent. The Company expects the effective tax rate for fiscal 2012 to be approximately 24 percent.
During the first quarter of 2012, the Company repurchased 0.1 million shares of its common stock at a cost of $8.0 million. At December 31, 2011, $194.0 million remained available under the $1.0 billion share repurchase authorization.
Conference Call
A conference call to discuss our financial results will take place at 8:30 A.M. Eastern Time on January 25, 2012. The call and related financial charts will be webcast and accessible via the Rockwell Automation website (http://www.rockwellautomation.com/investors/).
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This news release contains statements (including certain projections and business trends) that are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Words such as “believe”, “estimate”, “project”, “plan”, “expect”, “anticipate”, “will”, “intend” and other similar expressions may identify forward-looking statements. Actual results may differ materially from those projected as a result of certain risks and uncertainties, many of which are beyond our control, including but not limited to:
| • | macroeconomic factors, including global and regional business conditions, the availability and cost of capital, the cyclical nature of our customers' capital spending, sovereign debt concerns and currency exchange rates; |
| • | laws, regulations and governmental policies affecting our activities in the countries where we do business; |
| • | the successful development of advanced technologies and demand for and market acceptance of new and existing products; |
| • | the availability, effectiveness and security of our information technology systems; |
| • | competitive product and pricing pressures; |
| • | a disruption of our operations due to natural disasters, acts of war, strikes, terrorism, social unrest or other causes; |
| • | intellectual property infringement claims by others and the ability to protect our intellectual property; |
| • | our ability to successfully address claims by taxing authorities in the various jurisdictions where we do business; |
| • | our ability to attract and retain qualified personnel; |
| • | our ability to manage costs related to employee retirement and health care benefits; |
| • | the uncertainties of litigation; |
| • | a disruption of our distribution channels; |
| • | the availability and price of components and materials; |
| • | the successful execution of our cost productivity and globalization initiatives; and |
| • | other risks and uncertainties, including but not limited to those detailed from time to time in our Securities and Exchange Commission filings. |
These forward-looking statements reflect our beliefs as of the date of filing this release. We undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Rockwell Automation, Inc. (NYSE: ROK), the world’s largest company dedicated to industrial automation and information, makes its customers more productive and the world more sustainable. Headquartered in Milwaukee, Wis., Rockwell Automation employs over 21,000 people serving customers in more than 80 countries.
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ROCKWELL AUTOMATION, INC.
SALES AND EARNINGS INFORMATION
(in millions, except per share amounts)
| Three Months Ended | ||||||||
| December 31, | ||||||||
| 2011 | 2010 | |||||||
| Sales |
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| Architecture & Software (a) |
$ | 650.5 | $ | 613.9 | ||||
| Control Products & Solutions (b) |
823.4 | 751.9 | ||||||
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| Total sales (c) |
$ | 1,473.9 | $ | 1,365.8 | ||||
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| Segment operating earnings |
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| Architecture & Software (d) |
$ | 186.3 | $ | 153.1 | ||||
| Control Products & Solutions (e) |
97.5 | 68.9 | ||||||
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| Total segment operating earnings1 (f) |
283.8 | 222.0 | ||||||
| Purchase accounting depreciation and amortization |
(5.0 | ) | (4.8 | ) | ||||
| General corporate—net |
(20.9 | ) | (15.7 | ) | ||||
| Interest expense |
(15.0 | ) | (14.8 | ) | ||||
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| Income before income taxes |
242.9 | 186.7 | ||||||
| Income tax provision |
(59.6 | ) | (36.6 | ) | ||||
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| Net income |
$ | 183.3 | $ | 150.1 | ||||
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| Diluted earnings per share |
$ | 1.27 | $ | 1.04 | ||||
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| Average diluted shares |
143.9 | 144.5 | ||||||
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| Segment operating margin |
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| Architecture & Software (d/a) |
28.6 | % | 24.9 | % | ||||
| Control Products & Solutions (e/b) |
11.8 | % | 9.2 | % | ||||
| Total segment operating margin1 (f/c) |
19.3 | % | 16.3 | % | ||||
| 1 | Total segment operating earnings and total segment operating margin are non-GAAP financial measures. We believe that these measures are useful to investors as measures of operating performance. We use these measures to monitor and evaluate the profitability of our operating segments. Our measure of total segment operating earnings may be different from that used by other companies. |
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ROCKWELL AUTOMATION, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(in millions)
| Three Months Ended December 31, |
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| 2011 | 2010 | |||||||
| Sales |
$ | 1,473.9 | $ | 1,365.8 | ||||
| Cost of sales |
(855.2 | ) | (821.9 | ) | ||||
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| Gross profit |
618.7 | 543.9 | ||||||
| Selling, general and administrative expenses |
(362.4 | ) | (347.0 | ) | ||||
| Other income |
1.6 | 4.6 | ||||||
| Interest expense |
(15.0 | ) | (14.8 | ) | ||||
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| Income before income taxes |
242.9 | 186.7 | ||||||
| Income tax provision |
(59.6 | ) | (36.6 | ) | ||||
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| Net income |
$ | 183.3 | $ | 150.1 | ||||
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ROCKWELL AUTOMATION, INC.
CONDENSED BALANCE SHEET INFORMATION
(in millions)
| December 31, | September 30, | |||||||
| 2011 | 2011 | |||||||
| Assets |
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| Cash and cash equivalents |
$ | 884.0 | $ | 988.9 | ||||
| Short-term investments |
150.0 | — | ||||||
| Receivables |
1,044.8 | 1,063.4 | ||||||
| Inventories |
677.3 | 641.7 | ||||||
| Property, net |
559.1 | 561.4 | ||||||
| Goodwill and intangibles |
1,154.9 | 1,170.6 | ||||||
| Other assets |
809.0 | 858.9 | ||||||
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| Total |
$ | 5,279.1 | $ | 5,284.9 | ||||
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| Liabilities and Shareowners’ Equity |
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| Short-term debt |
$ | 350.0 | $ | — | ||||
| Accounts payable |
447.1 | 455.1 | ||||||
| Long-term debt |
905.0 | 905.0 | ||||||
| Other liabilities |
1,722.2 | 2,176.8 | ||||||
| Shareowners’ equity |
1,854.8 | 1,748.0 | ||||||
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| Total |
$ | 5,279.1 | $ | 5,284.9 | ||||
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ROCKWELL AUTOMATION, INC.
CONDENSED CASH FLOW INFORMATION
(in millions)
| Three Months Ended | ||||||||
| December 31, | ||||||||
| 2011 | 2010 | |||||||
| Continuing operations: |
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| Operating activities: |
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| Net income |
$ | 183.3 | $ | 150.1 | ||||
| Depreciation and amortization |
32.6 | 31.9 | ||||||
| Retirement benefits expense |
26.2 | 25.2 | ||||||
| Pension trust contributions |
(309.2 | ) | (7.8 | ) | ||||
| Receivables/inventories/payables |
(40.5 | ) | (115.6 | ) | ||||
| Compensation and benefits |
(150.8 | ) | (141.6 | ) | ||||
| Income taxes |
57.0 | 49.5 | ||||||
| Other |
12.4 | 20.9 | ||||||
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| Cash (used for) provided by operating activities |
(189.0 | ) | 12.6 | |||||
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| Investing activities: |
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| Capital expenditures |
(31.6 | ) | (20.3 | ) | ||||
| Acquisition of businesses, net of cash acquired |
(10.9 | ) | — | |||||
| Purchases of short-term investments |
(150.0 | ) | — | |||||
| Proceeds from sale of property and investments |
1.8 | 4.1 | ||||||
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| Cash used for investing activities |
(190.7 | ) | (16.2 | ) | ||||
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| Financing activities: |
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| Net issuance of short-term debt |
350.0 | — | ||||||
| Cash dividends |
(60.3 | ) | (49.7 | ) | ||||
| Purchases of treasury stock |
(9.7 | ) | (43.6 | ) | ||||
| Proceeds from the exercise of stock options |
5.2 | 43.6 | ||||||
| Excess income tax benefit from share-based compensation |
9.8 | 12.1 | ||||||
| Other financing activities |
(0.1 | ) | (0.1 | ) | ||||
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| Cash provided by (used for) financing activities |
294.9 | (37.7 | ) | |||||
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| Effect of exchange rate changes on cash |
(19.9 | ) | (2.6 | ) | ||||
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| Cash used for continuing operations |
(104.7 | ) | (43.9 | ) | ||||
| Discontinued operations: |
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| Cash used for discontinued operations |
(0.2 | ) | (0.2 | ) | ||||
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| Decrease in cash and cash equivalents |
$ | (104.9 | ) | $ | (44.1 | ) | ||
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ROCKWELL AUTOMATION, INC.
OTHER SUPPLEMENTAL INFORMATION
(in millions)
Organic Sales
Our press release contains information regarding sales excluding the effect of changes in currency and organic sales, which we define as sales excluding the effect of changes in currency exchange rates and acquisitions. We believe these non-GAAP measures provide useful information to investors because they reflect regional performance from our activities without the effect of changes in currency exchange rates and/or acquisitions. We use organic sales and sales excluding the effect of changes in currency as two measures to monitor and evaluate our regional performance. We determine the effect of changes in currency exchange rates by translating the respective period’s sales using the currency exchange rates that were in effect during the prior year. When we acquire businesses, we exclude sales in the current year for which there are no comparable sales in the prior period. Organic sales growth is calculated by comparing organic sales to reported sales in the prior year. Sales are attributed to the geographic regions based on the country of destination.
The following is a reconciliation of reported sales to organic sales for the three months ended December 31, 2011 compared to sales for the three months ended December 31, 2010:
| Three Months Ended December 31, | ||||||||||||||||||||||||
| 2011 | 2010 | |||||||||||||||||||||||
| Sales | Effect of Changes in Currency |
Sales Excluding Effect of Changes in Currency |
Effect of Acquisitions |
Organic Sales |
Sales | |||||||||||||||||||
| United States |
$ | 717.6 | $ | 0.3 | $ | 717.9 | $ | (0.5 | ) | $ | 717.4 | $ | 661.5 | |||||||||||
| Canada |
105.2 | 0.7 | 105.9 | — | 105.9 | 95.6 | ||||||||||||||||||
| Europe, Middle East, Africa |
315.0 | 4.3 | 319.3 | (11.6 | ) | 307.7 | 283.2 | |||||||||||||||||
| Asia-Pacific |
213.2 | (1.0 | ) | 212.2 | (0.1 | ) | 212.1 | 212.0 | ||||||||||||||||
| Latin America |
122.9 | 7.0 | 129.9 | — | 129.9 | 113.5 | ||||||||||||||||||
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| Total |
$ | 1,473.9 | $ | 11.3 | $ | 1,485.2 | $ | (12.2 | ) | $ | 1,473.0 | $ | 1,365.8 | |||||||||||
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The following is a reconciliation of reported sales to organic sales for our reporting segments for the three months ended December 31, 2011 compared to sales for the three months ended December 31, 2010:
| Three Months Ended December 31, | ||||||||||||||||||||||||
| 2011 | 2010 | |||||||||||||||||||||||
| Sales | Effect of Changes in Currency |
Sales Excluding Effect of Changes in Currency |
Effect of Acquisitions |
Organic Sales |
Sales | |||||||||||||||||||
| Architecture & Software |
$ | 650.5 | $ | 4.6 | $ | 655.1 | $ | — | $ | 655.1 | $ | 613.9 | ||||||||||||
| Control Products & Solutions |
823.4 | 6.7 | 830.1 | (12.2 | ) | 817.9 | 751.9 | |||||||||||||||||
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| Total |
$ | 1,473.9 | $ | 11.3 | $ | 1,485.2 | $ | (12.2 | ) | $ | 1,473.0 | $ | 1,365.8 | |||||||||||
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ROCKWELL AUTOMATION, INC.
OTHER SUPPLEMENTAL INFORMATION
(in millions)
Free Cash Flow
Our definition of free cash flow, which is a non-GAAP financial measure, takes into consideration capital investments required to maintain the operations of our businesses and execute our strategy. We account for share-based compensation under U.S. GAAP, which requires that we report the excess income tax benefit from share-based compensation as a financing cash flow rather than as an operating cash flow. We have added this benefit back to our calculation of free cash flow in order to generally classify cash flows arising from income taxes as operating cash flows.
In our opinion, free cash flow provides useful information to investors regarding our ability to generate cash from business operations that is available for acquisitions and other investments, service of debt principal, dividends and share repurchases. We use free cash flow, as defined, as one measure to monitor and evaluate performance. Our definition of free cash flow may be different from definitions used by other companies.
The following table summarizes free cash flow by quarter:
| Quarter Ended | ||||||||||||||||||||
| Dec. 31, | March 31, | June 30, | Sept. 30, | Dec. 31, | ||||||||||||||||
| 2010 | 2011 | 2011 | 2011 | 2011 | ||||||||||||||||
| Cash provided by (used for) continuing operating activities |
$ | 12.6 | $ | 225.2 | $ | 224.7 | $ | 181.2 | $ | (189.0 | ) | |||||||||
| Capital expenditures of continuing operations |
(20.3 | ) | (22.6 | ) | (33.1 | ) | (44.1 | ) | (31.6 | ) | ||||||||||
| Excess income tax benefit from share-based compensation |
12.1 | 23.6 | 2.1 | 0.3 | 9.8 | |||||||||||||||
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| Free cash flow1 |
$ | 4.4 | $ | 226.2 | $ | 193.7 | $ | 137.4 | $ | (210.8 | ) | |||||||||
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| 1 | Free cash flow for the first quarter of 2012 and the fourth quarter of 2011 include discretionary pre-tax contributions to the company’s U.S. pension trust of $300 million and $150 million, respectively. |
Return On Invested Capital
Our press release contains information regarding Return On Invested Capital (ROIC), which is a non-GAAP financial measure. We believe that ROIC is useful to investors as a measure of performance and of the effectiveness of the use of capital in our operations. We use ROIC as one measure to monitor and evaluate performance. Our measure of ROIC may be different from that used by other companies. We define ROIC as the percentage resulting from the following calculation:
(a) Income from continuing operations, before interest expense, income tax provision, and purchase accounting depreciation and amortization, for the most recent twelve months, divided by;
(b) average invested capital for the year, calculated as a five quarter rolling average using the sum of short-term debt, long-term debt, shareowners’ equity, and accumulated amortization of goodwill and other intangible assets, minus cash and cash equivalents and short-term investments, multiplied by;
(c) one minus the effective tax rate for the twelve-month period.
ROIC is calculated as follows:
| Twelve Months Ended | ||||||||
| December 31, | ||||||||
| 2011 | 2010 | |||||||
| (a) Return |
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| Income from continuing operations |
$ | 730.3 | $ | 512.7 | ||||
| Interest expense |
59.7 | 59.9 | ||||||
| Income tax provision |
193.5 | 120.9 | ||||||
| Purchase accounting depreciation and amortization |
20.0 | 19.1 | ||||||
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| Return |
1,003.5 | 712.6 | ||||||
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| (b) Average invested capital |
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| Short-term debt |
70.0 | — | ||||||
| Long-term debt |
905.0 | 904.8 | ||||||
| Shareowners’ equity |
1,788.6 | 1,441.8 | ||||||
| Accumulated amortization of goodwill and intangibles |
725.5 | 687.4 | ||||||
| Cash and cash equivalents |
(936.9 | ) | (788.4 | ) | ||||
| Short-term investments |
(30.0 | ) | — | |||||
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| Average invested capital |
2,522.2 | 2,245.6 | ||||||
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| (c) Effective tax rate |
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| Income tax provision |
193.5 | 120.9 | ||||||
| Income from continuing operations before income taxes |
$ | 923.8 | $ | 633.6 | ||||
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| Effective tax rate |
20.9 | % | 19.1 | % | ||||
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| (a) / (b) * (1-c) Return On Invested Capital |
31.5 | % | 25.7 | % | ||||
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