During the conference, Mr. Kozlowski stated, "Tyco just completed an outstanding first quarter in terms of sales and earnings. That quarter was marked by a continuation of the strong organic growth we experienced during our last fiscal year, and exceeded Wall Street analysts consensus earnings per share estimates. Two-thirds of the way through the current quarter, we can say with confidence that our outlook for the quarter is positive. We feel comfortable with consensus earnings estimates for the second quarter and the full fiscal year."
Mr. Kozlowski continued, "At the end of the first quarter, we discussed potential uncertainty in the end markets of our electronics business, but product demand, while softening in some areas and accelerating in others, has continued to meet our forecasts for this quarter and the fiscal year. Tyco Electronics has become a faster, more flexible supplier, able to rapidly adapt to the evolving technology needs of our current and prospective customers. These changes include sharp reductions in our product cost, R&D lead times and manufacturing cycle times and a significant expansion of our product lines through the successful integration into Tyco Electronics of the Raychem, Siemens EC, the Thomas & Betts OEM division, and the Lucent Power Systems business acquisitions. These actions - and the results they have produced - are typical of Tyco's approach to generating above-market growth rates and margins, and to creating product demand by appealing to significant new customers and by further penetrating existing customers.
"On other fronts, the acquisitions of Mallinckrodt, Lucent Power Systems, and Simplex Time Recorder are each exceeding our expectations. We are achieving substantial cost reductions as these businesses are integrated into their respective divisions. Each of these acquisitions potentially provides further upside in terms of the timing and magnitude of the earnings that they will deliver, and the revenue synergies that they will generate. We anticipate more opportunities for acquisitions in each of our businesses.
"Tyco also moved aggressively in recent weeks to continue to strengthen our balance sheet through debt refinancing, selective use of equity for acquisitions, and continued strong cash flow generation. Of particular note, we raised over $5.7 billion through two successful offerings of zero-coupon convertible senior debentures. These offerings provided an attractive mechanism to refinance existing and more expensive short-term debt, thereby reducing Tyco's interest costs. Tyco's balance sheet remains solid, appropriately supported by our cash generation and coverage ratios.
"In sum, we are comfortable with Tyco's prospects. Across all of our businesses, our visibility to end-market demand, channel inventories, current booking rates, and backlogs, and the high level of recurring revenues from our service businesses, give us confidence that Tyco will produce another strong year of organic revenue, earnings, and cash flow growth."
ABOUT TYCO INTERNATIONAL LTD.
Tyco International Ltd. (NYSE: TYC; LSE: TYI; BSX: TYC) is a diversified manufacturing and service company. Tyco is the world's largest manufacturer and servicer of electrical and electronic components; the world's largest designer, manufacturer, installer and servicer of undersea telecommunications systems; the world's largest manufacturer, installer and provider of fire protection systems and electronic security services, and the world's largest manufacturer of flow control valves. Tyco also holds strong leadership positions in disposable medical products, diagnostic imaging, bulk pharmaceuticals, wound closure products, plastics and adhesives. Tyco operates in more than 100 countries and had fiscal 2000 sales of $28.9 billion.
Forward-Looking Information
This release contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may vary materially from the expectations contained in the forward-looking statements. The forward-looking statements in this release include statements addressing the following subjects: future expectations of sales, earnings and cash flow and the timing and magnitude of the benefits from acquisitions.
The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: economic conditions in general, or specific to our end-markets, and other business, competitive and/or regulatory factors.
More detailed information about these factors is set forth in Tyco's filings with the Securities and Exchange Commission, including Tyco's Annual Report on Form 10-K for the fiscal year ended September 30, 2000 and its most recent quarterly report on Form 10-Q. Tyco is under no obligation to (and expressly disclaim any such obligation to) update or alter their forward-looking statements whether as a result of new information, future events or otherwise.