PEMBROKE, Bermuda, Feb. 5 /PRNewswire-FirstCall/ -- ($ millions,
except per-share amounts) Q1 2008 Q1 2007 %Change Revenue $4,870
$4,365 12% Income from Continuing Operations $369 $163 126% Diluted
EPS from Continuing Operations $0.74 $0.32 131% Special Items Per
Share After Tax $0.01 ($0.17) -- Income from Continuing Operations
Before Special Items $361 $249 45% Diluted EPS from Continuing
Operations Before Special Items $0.73 $0.49 49% -- Revenue
increases 12% with organic revenue growth of 6% -- Company achieves
operating margin of 10.2% and operating margin before special items
of 10.7% -- Guidance for Diluted EPS from continuing operations
before special items for full year 2008 increased to a range of
$2.60 to $2.70 -- Company has repurchased 13.3 million shares for
$531 million under existing $1 billion share repurchase program
Tyco International Ltd. (NYSE:TYC)(BSX:TYC) today reported $0.74 in
diluted GAAP earnings per share (EPS) from continuing operations
and diluted EPS from continuing operations of $0.73 before special
items for the fiscal first quarter of 2008. Diluted GAAP EPS from
continuing operations was positively impacted by special items
which totaled $0.01 per share. Diluted EPS from continuing
operations before special items increased 49% in the quarter.
Revenue in the quarter increased 12% versus the prior year to $4.9
billion, with organic revenue growth of 6%. The company's operating
margin in the quarter was 10.2% and the operating margin before
special items was 10.7% driven by higher revenue and better
productivity. The GAAP tax rate for the quarter was 24.8% and was
adversely impacted by 1.3 percentage points due to special items.
Special items increased EPS by $0.01 per share in the quarter and
consisted of the following: $0.08 per share of income for
separation-related items, partially offset by charges of $0.03 per
share for restructuring activities and $0.04 per share for certain
tax items. On January 23, the company raised its full year guidance
for fiscal 2008 diluted EPS from continuing operations before
special items from $2.50 - $2.65 to $2.60 - $2.70. Management will
discuss the company's outlook for the fiscal second quarter during
a conference call and webcast today beginning at 8:30 a.m. EST.
"Our first quarter results exceeded our previous guidance with
improved operating performance in each of our businesses," said
Tyco Chairman and Chief Executive Officer Ed Breen. "This
performance, combined with the progress we are making on our key
initiatives, puts us on track for a solid year in 2008." Organic
revenue growth, free cash flow, operating income before special
items, operating margin before special items, income from
continuing operations before special items and EPS from continuing
operations before special items are all non-GAAP financial measures
and are described below. For a reconciliation of these non-GAAP
measures, see the attached tables. Additional schedules can be
found at http://www.tyco.com/ on the Investor Relations portion of
Tyco's Website. SEGMENT RESULTS The financial results presented in
the tables below are in accordance with GAAP unless otherwise
indicated. All dollar amounts are pre-tax and stated in millions.
All comparisons are to the fiscal first quarter of 2007 unless
otherwise indicated. ADT Worldwide Q1 2008 Q1 2007 %Change Revenue
$1,999 $1,863 7% Operating Income $249 $201 24% Operating Margin
12.5% 10.8% -- Special Items ($7) ($31) -- Operating Income Before
Special Items $256 $232 10% Operating Margin Before Special Items
12.8% 12.5% -- Revenue increased 7% in the quarter with organic
revenue growth of 3.4% led by double digit growth in Asia and Latin
America. North America grew 2% organically and the Europe, Middle
East and Africa region grew 1% organically. Operating income was
$249 million in the quarter and the operating margin was 12.5%.
Special items in the quarter consisted of $7 million of
restructuring charges incurred primarily in Europe. Operating
income before special items increased 10% to $256 million and
included expenses of $24 million to convert certain North American
customers to digital services in advance of the analog-to-digital
transition for wireless phone services. The operating margin before
special items improved to 12.8%. Flow Control Q1 2008 Q1 2007
%Change Revenue $1,074 $835 29% Operating Income $171 $108 58%
Operating Margin 15.9% 12.9% -- Special Items ($2) ($5) --
Operating Income Before Special Items $173 $113 53% Operating
Margin Before Special Items 16.1% 13.5% -- Revenue in Flow Control
increased 29% in the quarter with organic revenue growth of 17.7%
driven by strong double digit growth across industrial valves,
water and thermal controls. Revenue growth continues to benefit
from strong demand in key end markets - particularly energy and
water. Operating income was $171 million and the operating margin
was 15.9%. Special items in the quarter consisted of $2 million of
restructuring charges. Operating income before special items
increased 53% to $173 million. The increase in operating income and
the operating margin was due to higher revenue and improved
productivity. Fire Protection Services Q1 2008 Q1 2007 %Change
Revenue $832 $791 5% Operating Income $72 $59 22% Operating Margin
8.7% 7.5% -- Special Items -- -- -- Operating Income Before Special
Items $72 $59 22% Operating Margin Before Special Items 8.7% 7.5%
-- Revenue in the Fire Protection Services segment increased 5%
driven by foreign exchange. Organic revenue growth in the North
American SimplexGrinnell business was 3.6% while the international
fire businesses declined 5% organically primarily due to the
planned exit of certain non-core international businesses.
Operating income increased 22% to $72 million and the operating
margin increased 120 basis points to 8.7% led primarily by North
America with a modest improvement in the international fire
businesses. Electrical and Metal Products Q1 2008 Q1 2007 %Change
Revenue $487 $443 10% Operating Income $41 $41 0% Operating Margin
8.4% 9.3% -- Special Items ($4) -- -- Operating Income Before
Special Items $45 $41 10% Operating Margin Before Special Items
9.2% 9.3% -- Revenue in Electrical and Metal Products increased 10%
in the quarter with better volume and pricing for steel tubular
products partially offset by lower copper spreads. Organic revenue
growth was 7.4%. Operating income was $41 million and included $4
million of restructuring charges. Operating income before special
items of $45 million improved primarily due to higher volume.
Safety Products Q1 2008 Q1 2007 %Change Revenue $447 $406 10%
Operating Income $86 $71 21% Operating Margin 19.2% 17.5% --
Special Items ($1) ($7) -- Operating Income Before Special Items
$87 $78 12% Operating Margin Before Special Items 19.5% 19.2% --
Revenue in the Safety Products segment increased 10% in the quarter
with organic revenue growth of 4.7% driven by the fire suppression
and electronic security businesses. Operating income was $86
million and the operating margin was 19.2%. Operating income before
special items was $87 million and the operating margin before
special items was 19.5%. All three lines of business - fire
suppression, electronic security and life safety - contributed to
the increase in operating income before special items, primarily
led by higher volume in fire suppression. OTHER ITEMS -- Net cash
used in operating activities was $152 million in the quarter. The
company had a free cash outflow of $407 million, which included $53
million of payments for separation and restructuring activities. --
Corporate expenses were $126 million and included $10 million of
separation expense. Revenue in Corporate and Other was $31 million
and operating income from business operations was $6 million. --
Other income includes $50 million of income related to the Tax
Sharing Agreement entered into as part of the separation and
recorded in connection with the adoption of FASB Interpretation No.
48. ABOUT TYCO INTERNATIONAL Tyco International (NYSE:TYC) is a
diversified, global company that provides vital products and
services to customers in more than 60 countries. Tyco is a leading
provider of security products and services, fire protection and
detection products and services, valves and controls, and other
industrial products. Tyco had 2007 revenue of more than $18 billion
and has 118,000 employees worldwide. More information on Tyco can
be found at http://www.tyco.com/. CONFERENCE CALL AND WEBCAST
Today's conference call for investors can be accessed in the
following ways: -- At Tyco's website: http://investors.tyco.com/.
-- By telephone: For both "listen-only" participants and those
participants who wish to take part in the question-and-answer
portion of the call, the telephone dial-in number in the United
States is (800) 230-1085. The telephone dial-in number for
participants outside the United States is (612) 332-0107. -- An
audio replay of the conference call will be available beginning at
10:30 a.m. on February 5, 2008 and ending on February 12, 2008. The
dial-in number for participants in the United States is (800)
475-6701. For participants outside the United States, the replay
dial-in number is (320) 365-3844. The replay access code for all
callers is 904017. NON-GAAP MEASURES "Organic revenue growth,"
"free cash flow (outflow)" (FCF), "income from continuing
operations before special items", "operating income before special
items", "operating margin before special items", and "earnings per
share (EPS) from continuing operations before special items" are
non-GAAP measures and should not be considered replacements for
GAAP results. Organic revenue growth is a useful measure used by
the company to measure the underlying results and trends in the
business. The difference between reported net revenue growth (the
most comparable GAAP measure) and organic revenue growth (the
non-GAAP measure) consists of the impact from foreign currency,
acquisitions and divestitures, and other changes that do not
reflect the underlying results and trends (for example, revenue
reclassifications and changes to the fiscal year). Organic revenue
growth is a useful measure of the company's performance because it
excludes items that: i) are not completely under management's
control, such as the impact of foreign currency exchange; or ii) do
not reflect the underlying growth of the company, such as
acquisition and divestiture activity. It may be used as a component
of the company's compensation programs. The limitation of this
measure is that it excludes items that have an impact on the
company's revenue. This limitation is best addressed by using
organic revenue growth in combination with the GAAP numbers. See
the accompanying tables to this press release for the
reconciliation presenting the components of organic revenue growth.
FCF is a useful measure of the company's cash which is free from
any significant existing obligation. The difference between cash
flows from operating activities (the most comparable GAAP measure)
and FCF (the non-GAAP measure) consists mainly of significant cash
outflows that the company believes are useful to identify. FCF
permits management and investors to gain insight into the number
that management employs to measure cash that is free from any
significant existing obligation. It may also be a significant
component in the company's incentive compensation plans. The
difference reflects the impact from: -- the sale of accounts
receivable programs, -- net capital expenditures, -- acquisition of
customer accounts (ADT dealer program), -- cash paid for purchase
accounting and holdback liabilities, and -- voluntary pension
contributions. The impact from the sale of accounts receivable
programs and voluntary pension contributions is added or subtracted
from the GAAP measure because this activity is driven by economic
financing decisions rather than operating activity. Capital
expenditures and the ADT dealer program are subtracted because they
represent long-term commitments. Cash paid for purchase accounting
and holdback liabilities is subtracted from Cash Flow from
Operating Activities because these cash outflows are not available
for general corporate uses. The limitation associated with using
FCF is that it subtracts cash items that are ultimately within
management's and the Board of Directors' discretion to direct and
that therefore may imply that there is less or more cash that is
available for the company's programs than the most comparable GAAP
measure. This limitation is best addressed by using FCF in
combination with the GAAP cash flow numbers. FCF as presented
herein may not be comparable to similarly titled measures reported
by other companies. The measure should be used in conjunction with
other GAAP financial measures. Investors are urged to read the
company's financial statements as filed with the Securities and
Exchange Commission, as well as the accompanying tables to this
press release that show all the elements of the GAAP measures of
Cash Flows from Operating Activities, Cash Flows from Investing
Activities, Cash Flows from Financing Activities and a
reconciliation of the company's total cash and cash equivalents for
the period. See the accompanying tables to this press release for a
cash flow statement presented in accordance with GAAP and a
reconciliation presenting the components of FCF. The company has
presented income from continuing operations before special items,
operating income and margin before special items and EPS from
continuing operations before special items, and forecast its EPS
from continuing operations before special items. Special Items
include charges and gains related to divestitures, acquisitions,
restructurings (including transaction costs related to the
separations of Tyco Electronics and Covidien into separate public
companies), and other income or charges that may mask the
underlying operating results and/or business trends of the company
or business segment, as applicable. The company utilizes income
from continuing operations, EPS and operating income and margin
before special items to assess overall operating performance,
segment level core operating performance and to provide insight to
management in evaluating overall and segment operating plan
execution and underlying market conditions. There may also be
significant components in the company's incentive compensation
plans. Operating income, operating margin, income from continuing
operations before special items and EPS before special items are
useful measures for investors because they permit more meaningful
comparisons of the company's underlying operating results and
business trends between periods. EPS before special items does not
reflect any additional adjustments that are not reflected in income
from continuing operations before special items. The difference
between income from continuing operations before special items and
operating income and margin before special items versus income from
continuing operations, operating income and operating margin (the
most comparable GAAP measures) consists of the impact of charges
and gains related to divestitures, acquisitions, restructurings
(including transaction costs related to the separations of Tyco
Electronics and Covidien into separate public companies), and other
income or charges that may mask the underlying operating results
and/or business trends. The limitation of these measures is that
they exclude the impact (which may be material) of items that
increase or decrease the company's reported income from continuing
operations, EPS and operating income and margin. This limitation is
best addressed by using income from continuing operations before
special items and operating income and margin before special items
in combination with the most comparable GAAP measures in order to
better understand the amounts, character and impact of any increase
or decrease on reported results. The company presents its EPS
forecast before special items to give investors a perspective on
the underlying business results. Because the company often cannot
predict the amount and timing of unusual or special items and
associated charges or gains that may be recorded in the company's
financial statements, it does not present forecasts that include
the impact of those items. See the accompanying tables to this
press release for the reconciliation presenting the components of
operating income before special items. FORWARD-LOOKING STATEMENTS
This release may contain certain "forward-looking statements"
within the meaning of the United States Private Securities
Litigation Reform Act of 1995. These statements are based on
management's current expectations and are subject to risks,
uncertainty and changes in circumstances, which may cause actual
results, performance or achievements to differ materially from
anticipated results, performance or achievements. All statements
contained herein that are not clearly historical in nature are
forward-looking and the words "anticipate," "believe," "expect,"
"estimate," "plan," and similar expressions are generally intended
to identify forward-looking statements. The forward-looking
statements in this release include statements addressing future
financial condition and operating results. Economic, business,
competitive and/or regulatory factors affecting Tyco's businesses
are examples of factors, among others, that could cause actual
results to differ materially from those described in the
forward-looking statements. Tyco is under no obligation to (and
expressly disclaims any such obligation to) update or alter its
forward-looking statements whether as a result of new information,
future events or otherwise. More detailed information about these
and other factors is set forth in Tyco's Annual Report on Form 10-K
for the fiscal year ended September 28, 2007. TYCO INTERNATIONAL
LTD. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in millions,
except per share data) (Unaudited) Quarter Ended December 28,
December 29, 2007 2006 Net revenue $4,870 $4,365 Cost of sales
3,177 2,871 Selling, general and administrative expenses 1,174
1,157 Separation costs 9 25 Restructuring and asset impairment
charges, net 11 56 Operating income 499 256 Interest income 58 14
Interest expense (117) (66) Other income, net 52 1 Income from
continuing operations before income taxes and minority interest 492
205 Income taxes (122) (41) Minority interest (1) (1) Income from
continuing operations 369 163 (Loss) income from discontinued
operations, net of income taxes (6) 630 Net income $363 $793 Basic
earnings per common share: Income from continuing operations $0.75
$0.33 (Loss) income from discontinued operations (0.01) 1.27 Net
income $0.74 $1.60 Diluted earnings per common share: Income from
continuing operations $0.74 $0.32 (Loss) income from discontinued
operations (0.01) 1.25 Net income $0.73 $1.57 Weighted-average
number of shares outstanding: Basic 493 496 Diluted 497 509 Income
Reconciliation for Diluted EPS: Income from continuing operations
$369 $163 Add back of interest expense for convertible debt - 2
Income from continuing operations, giving effect to dilutive
adjustments 369 165 (Loss) income from discontinued operations (6)
630 Add back of interest expense for convertible debt - 3 Net
income, giving effect to dilutive adjustments $363 $798 NOTE: These
financial statements should be read in conjunction with the
Consolidated Financial Statements and accompanying notes contained
in the Company's Annual Report on Form 10-K for the fiscal year
ended September 28, 2007. TYCO INTERNATIONAL LTD. RESULTS OF
SEGMENTS (in millions) (Unaudited) Quarter Ended December 28,
December 29, 2007 2006 NET REVENUE ADT Worldwide $1,999 $1,863 Flow
Control 1,074 835 Fire Protection Services 832 791 Electrical and
Metal Products 487 443 Safety Products 447 406 Corporate and Other
(1) 31 27 Total Net Revenue $4,870 $4,365 OPERATING INCOME AND
MARGIN ADT Worldwide $249 12.5% $201 10.8% Flow Control 171 15.9%
108 12.9% Fire Protection Services 72 8.7% 59 7.5% Electrical and
Metal Products 41 8.4% 41 9.3% Safety Products 86 19.2% 71 17.5%
Corporate and Other (2) (120) N/M (224) N/M Operating Income and
Margin $499 10.2% $256 5.9% (1) Revenue related to certain
international building products businesses. (2) Includes operating
income of $6 million and $7 million for the three months ended
December 28, 2007 and December 29, 2006, respectively, primarily
related to certain international building products businesses. TYCO
INTERNATIONAL LTD. CONDENSED CONSOLIDATED BALANCE SHEETS (in
millions) (Unaudited) December 28, September 28, 2007 2007 Current
Assets: Cash and cash equivalents $1,069 $1,894 Accounts
receivable, net 3,040 2,961 Inventories 1,953 1,826 Class action
settlement escrow 3,011 2,992 Other current assets 1,711 1,634
Assets of discontinued operations 1,007 1,044 Total current assets
11,791 12,351 Property, plant and equipment, net 3,573 3,551
Goodwill 11,736 11,691 Intangible assets, net 2,695 2,697 Other
assets 2,675 2,525 Total Assets $32,470 $32,815 Current Liabilities
Short-term debt and current maturities of long-term debt $693 $380
Accounts payable 1,553 1,682 Class action settlement liability
3,011 2,992 Accrued and other current liabilities 3,071 3,493
Liabilities of discontinued operations 554 560 Total current
liabilities 8,882 9,107 Long-term debt 3,777 4,076 Other
liabilities 4,013 3,941 Total Liabilities 16,672 17,124 Minority
interest 70 67 Shareholders' equity 15,728 15,624 Total Liabilities
and Shareholders' Equity $32,470 $32,815 NOTE: These financial
statements should be read in conjunction with the Consolidated
Financial Statements and accompanying notes contained in the
Company's Annual Report on Form 10-K for the fiscal year ended
September 28, 2007. TYCO INTERNATIONAL LTD. CONSOLIDATED STATEMENTS
OF CASH FLOWS (in millions) (Unaudited) Quarter Ended December 28,
December 29, 2007 2006 Cash Flows from Operating Activities: Net
income $363 $793 Loss (income) from discontinued operations 6 (630)
Income from continuing operations 369 163 Adjustments to reconcile
net cash provided by operating activities: Depreciation and
amortization 276 296 Non-cash compensation expense 35 45 Deferred
income taxes (61) (7) Provision for losses on accounts receivable
and inventory 30 24 Other non-cash items 13 4 Changes in assets and
liabilities, net of the effects of acquisitions and divestitures:
Accounts receivable, net (73) 22 Inventories (117) (207) Other
Current Assets (53) 115 Accounts payable (143) (56) Accrued and
other liabilities (382) (210) Other (46) (59) Net cash (used in)
provided by operating activities (152) 130 Net cash (used in)
provided by discontinued operating activities (25) 697 Cash Flows
from Investing Activities: Capital expenditures (176) (143)
Proceeds from disposal of assets 7 6 Acquisition of businesses, net
of cash acquired (22) (16) Acquisition of customer accounts (ADT
dealer program) (90) (97) Other (4) 82 Net cash used in investing
activities (285) (168) Net cash used in discontinued investing
activities (19) (267) Cash Flows from Financing Activities: Net
repayments of debt 8 (2) Proceeds from exercise of share options 13
120 Dividends paid (74) (199) Repurchase of common shares by
subsidiary (229) (660) Transfers (to) from discontinued operations
(43) 390 Other (70) 7 Net cash used in financing activities (395)
(344) Net cash provided by (used in) discontinued financing
activities 44 (396) Effect of currency translation on cash 7 16
Effect of currency translation on cash of discontinued operations -
10 Net decrease in cash and cash equivalents (825) (322) Less: net
increase in cash related to discontinued operations - (44) Cash and
cash equivalents at beginning of period 1,894 2,187 Cash and cash
equivalents at end of period $1,069 $1,821 Reconciliation to "Free
Cash Flow": Net cash (used in) provided by operating activities
$(152) $130 Decrease in sale of accounts receivable 5 2 Capital
expenditures, net (169) (137) Acquisition of customer accounts (ADT
dealer program) (90) (97) Purchase accounting and holdback
liabilities (1) (2) Voluntary pension contributions - 18 Free Cash
Flow $(407) $(86) NOTE: Free cash flow is a non-GAAP measure. See
description of non-GAAP measures contained in this release. TYCO
INTERNATIONAL LTD. ORGANIC REVENUE GROWTH RECONCILIATION (in
millions) (Unaudited) Quarter Ended December 28, 2007 Organic
Revenue Net Revenue Foreign Currency Other Growth ADT Worldwide
$1,999 7.3% $84 4.5% $(11) -0.6% $63 3.4% Flow Control 1,074 28.6%
92 11.0% (1) 0.0% 148 17.7% Fire Protection Services 832 5.2% 41
5.2% - 0.0% - 0.0% Electrical and Metal Products 487 9.9% 11 2.5% -
0.0% 33 7.4% Safety Products 447 10.1% 22 5.4% - 0.0% 19 4.7%
Corporate and Other 31 14.8% 3 11.1% - 0.0% 1 3.7% Total Net
Revenue $4,870 11.6% $253 5.8% $(12) -0.2% $264 6.0% Net Revenue
for the Quarter Ended December 29, 2006 ADT Worldwide $1,863 Flow
Control 835 Fire Protection Services 791 Electrical and Metal
Products 443 Safety Products 406 Corporate and Other 27 Total Net
Revenue $4,365 NOTE: Organic revenue growth is a non-GAAP measure.
See description of non-GAAP measures contained in this release.
TYCO INTERNATIONAL LTD. EARNINGS PER SHARE SUMMARY (Unaudited)
Quarter Year Quarter Ended Ended Ended Dec. March June Sept. Sept.
Dec. 29, 30, 29, 28, 28, 28, 2006 2007 2007 2007 2007 2007 Diluted
EPS from Continuing Operations $0.32 $0.31 ($6.16) $0.42 ($5.10)
$0.74 Restructuring charges in cost of sales - 0.00 0.00 0.01 0.01
0.01 Class action settlement, net - - 5.83 (0.02) 5.81 - Separation
costs 0.07 0.10 0.69 0.08 0.93 (0.08) Losses on divestitures - 0.00
0.00 - 0.01 - Restructuring and asset impairment charges, net 0.10
0.05 0.07 0.07 0.28 0.02 Goodwill impairment - - 0.09 - 0.09 - Tax
items - (0.12) - - (0.12) 0.04 Voluntary Replacement Program - - -
0.01 0.01 - Diluted EPS from Continuing Operations Before Special
Items $0.49 $0.34 $0.52 $0.57 $1.92 $0.73 TYCO INTERNATIONAL LTD.
For the Quarter Ended December 28, 2007 (in millions, except per
share data) (Unaudited) Fire ADT Protect- Electrical Corporate
World- Flow ion & Metal Safety and Operating wide Control
Services Products Products Other Income Operating Income $249 $171
$72 $41 $86 ($120) $499 Restructur- ing charges in cost of sales 1
2 3 Class action settlement, net Separation costs 10 10 Losses on
divestitures Restructuring and asset impairment charges, net 7 1 2
1 11 Goodwill impairment Tax items Voluntary Replacement Program
Operating Income Before Special Items $256 $173 $72 $45 $87 ($110)
$523 Income Diluted EPS Interest Other from from Expense, Expense,
Income Minority Continuing Continuing net net Taxes Interest
Operations Operations Operating Income ($59) $52 ($122) ($1) $369
$0.74 Restructuring charges in cost of sales (1) 2 0.01 Class
action settlement, net Separation costs 7 (50) (5) (38) (0.08)
Losses on divestitures Restructuring and asset impairment charges,
net (3) 8 0.02 Goodwill impairment Tax items 20 20 0.04 Voluntary
Replacement Program Operating Income Before Special Items ($52) $2
($111) ($1) $361 $0.73 Diluted Shares Outstanding 497 Diluted
Shares Outstanding - Before Special Items 497 DATASOURCE: Tyco
International Ltd. CONTACT: Media, Paul Fitzhenry, +1-609-720-4621,
or Investor Relations, Ed Arditte, +1-609-720-4621, or Karen Chin,
+1-609-720-4398, all of Tyco International Ltd. Web site:
http://www.tyco.com/
Copyright