"The strong results this quarter reflect the effects of continued internal growth coupled with the successful consolidation of recent acquisitions into our existing operations," said L. Dennis Kozlowsli, Tyco's Chairman and Chief Executive Officer. "We continue to benefit from increasing market shares and geographic penetration, as well as the broadening of our product and service offerings," he concluded.
DISPOSABLE AND SPECIALTY PRODUCTS
Earnings at Tyco's Disposable and Specialty Products group grew to $123.6 million, a 23 percent increase over the $100.6 million reached a year ago. Sales for the segment grew to $676.6 million versus last year's $638.9 million. Kendall's healthcare operations reported strong earnings in all areas, including the recently acquired INBRAND operations. These results reflect continued improvements being made in productivity. The Plastics group achieved higher results as cost reductions in all areas of the business took effect. The recently announced acquisition of Sherwood - Davis & Geck will, upon completion, provide additional product offerings for the disposable medical products group.
FIRE AND SECURITY SERVICES
Tyco's Fire and Security Services group, quarterly earnings increased 45 percent as they rose to $146.4 million versus $100.7 million last year. Sales reached $1.13 billion compared to $1.02 billion last year. The combination of Tyco's fire protection and security businesses on a worldwide basis continues to provide both increased sales opportunities and a higher recurring revenue stream. The recently announced Holmes Protection acquisition will further complement the growth in recurring revenue in this group.
FLOW CONTROL
Quarterly earnings at the Tyco Flow Control group increased 39 percent to $71.9 million from $51.0 million last year. Sales were $550.0 million compared to the prior year's $511.5 million. The integration of Keystone International with the existing flow control units has contributed to improved overall margins in all units of this segment as greater efficiencies in manufacturing and distribution take effect.
ELECTRICAL AND ELECTRONIC COMPONENTS
At Tyco's Electrical and Electronic Components group, which includes the results of Tyco Submarine Systems Ltd. (TSSL) acquired in July, 1997, earnings increased to $71.6 million versus the $22.5 million in last year's quarter. Sales rose to $334.3 million compared with $120.6 million in the prior year. In addition, TSSL continues to build its backlog of future cable systems. Tyco's Printed Circuit units also showed significant improvements over last year as shipments of printed circuit boards remained strong.
Tyco International Ltd., a diversified manufacturing and service company, is the world's largest manufacturer and installer of fire protection systems, the largest provider of electronic security services in North America and the United Kingdom and has strong leadership positions in disposable medical products, packaging materials, flow control products, electrical and electronic components and underwater telecommunications systems. The Company operates in more than 75 countries around the world and has annual revenues in excess of $11 billion.
FORWARD LOOKING INFORMATION
Certain statements in this release are "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All forward looking statements involve risks and uncertainties. In particular, any statements contained herein regarding the consummation and benefits of future acquisitions, as well as expectations with respect to future sales, operating efficiencies and product expansion, are subject to known and unknown risks, uncertainties and contingencies, many of which are beyond the control of the Company, which may cause actual results, performance or achievements to differ materially from anticipated results, performance or achievements. Factors that might affect such forward looking statements include, among other things, overall economic and business conditions, the demand for the Company's goods and services, competitive factors in the industries in which the Company competes, changes in government regulation and the timing, impact and other uncertainties of future acquisitions.
Table Following
TYCO INTERNATIONAL LTD.
RESULTS OF OPERATIONS (1) (2)
(in millions except per share data)
Three Months Ended
SALES
Income before income taxes
Income taxes
INCOME BEFORE
EXTRAORDINARY ITEM
EARNINGS PER SHARE: (3)
BASIC
DILUTED (4)
COMMON EQUIVALENT SHARES
BASIC
DILUTED
12/31/97
$2,687.5
=======
$359.4
(118.6)
$240.8
=======
$0.44
=======
$0.43
=======
545.1
=======
568.3
======= 12/31/96
$2,290.0
=======
$217.0
(66.5)
$150.5
=======
$0.31
=======
0.30
=======
489.7
=======
520.5
=======
(1)Three months ended December 31, 1997 are before extraordinary items of $0.9 million after-
tax.
(2)Three months ended December 31, 1996 are restated for poolings of interests with ADT,
Keystone, and INBRAND, and are before non-recurring items of $80.3 million after-tax and
extraordinary items of $2.6 million after-tax.
(3)Effective October 1, 1997 the Company adopted Statement of Financial Accounting
Standards No. 126, "Earnings Per Share," (SFAS 128"). SFAS 128 requires restatement of prior
period earnings presented after the effective date. This restatement did not effect reported diluted
earnings per share for the three months ended December 31, 1996.
(4)Earnings per share based on diluted shares assumes conversion of LYONs notes.
Accordingly, net interest expense of $2.2 million in 1997 and $3.3 million in 1996 must be
added back to income before extraordinary item for computing diluted earnings per share.