Exhibit 99
1201 S. Second Street
Milwaukee, WI 53204
USA
Fax: 414.382.5560
News Release
Contact | John Bernaden | Rondi Rohr-Dralle | ||
| Media Relations | Investor Relations | |||
| Rockwell Automation | Rockwell Automation | |||
| 414.382.2555 | 414.382.8510 |
Rockwell Automation Reports Third Quarter 2010 Results
| • | Revenue up 25 percent year over year and up 9 percent sequentially |
| • | Diluted EPS from continuing operations of $0.83 |
| • | Company raises fiscal 2010 EPS guidance to $2.95 to $3.05 |
MILWAUKEE (July 28, 2010) – Rockwell Automation, Inc. (NYSE: ROK) today reported fiscal 2010 third quarter revenue of $1,268.1 million, up 25 percent compared to $1,010.8 million in the third quarter of fiscal 2009. The year-over-year impact from currency translation was negligible in the quarter. Fiscal 2010 third quarter revenue was up
9 percent sequentially compared to the second quarter of fiscal 2010. Fiscal 2010 third quarter net income was $119.4 million ($0.83 per share), compared to $32.8 million ($0.23 per share) in the third quarter of fiscal 2009.
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Total segment operating earnings were $198.0 million in the third quarter of fiscal 2010, up from $86.3 million in the same period of 2009. Total segment operating margin in the third quarter of fiscal 2010 increased to 15.6 percent from 8.5 percent a year ago, primarily due to higher segment operating margin in the Architecture & Software segment.
Free cash flow was $116.7 million in the third quarter of fiscal 2010. Return on invested capital was 17.7 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, “I am pleased with the strong revenue and earnings performance this quarter. Our revenue growth was broad-based across all regions. China had an exceptional quarter with 42 percent year-over-year organic growth and Latin America rebounded strongly. Operating margin expanded and we increased spending to fuel future growth.”
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Outlook
Commenting on the outlook, Nosbusch added, “We expect fourth quarter revenue to grow sequentially on the strength of our solutions and services business and emerging markets. Based on our third quarter results and this outlook, we are raising our full-year fiscal 2010 guidance to earnings per share of $2.95 to $3.05 on revenue of approximately $4.8 billion.”
Nosbusch continued, “We have performed very well in the early part of the recovery. Although macroeconomic conditions are uncertain, we are optimistic that the global recovery will continue. I am confident in our strategy and our ability to execute. We are well-positioned to take advantage of improving market conditions as we proceed through the cycle.”
Following is a discussion of third quarter results for both segments.
Architecture & Software
Architecture & Software fiscal 2010 third quarter sales were $553.9 million, an increase of 39 percent from $399.5 million in the third quarter of fiscal 2009. Fiscal 2010 third quarter sales were up 7 percent sequentially from the second quarter of fiscal 2010. Segment operating earnings were $125.4 million in the third quarter of fiscal 2010, up from $43.3 million in the third quarter of fiscal 2009. Architecture & Software segment operating margin was 22.6 percent in the third quarter of fiscal 2010 compared to 10.8 percent a year ago. Segment operating margin increased primarily due to volume leverage.
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Control Products & Solutions
Control Products & Solutions fiscal 2010 third quarter sales were $714.2 million, an increase of 17 percent from $611.3 million in the third quarter of fiscal 2009. Currency translation contributed less than 1 percentage point to the increase. Fiscal 2010 third quarter sales were up 10 percent sequentially from the second quarter of fiscal 2010. Segment operating earnings were $72.6 million in the third quarter of fiscal 2010, up from $43.0 million in the third quarter of fiscal 2009. Control Products & Solutions segment operating margin was 10.2 percent in the third quarter of fiscal 2010 compared to 7.0 percent a year ago. Segment operating margin increased primarily due to volume leverage.
Other Information
Fiscal 2010 third quarter general corporate net expense was $23.1 million, up from $16.3 million in the third quarter of fiscal 2009, primarily due to performance-based compensation.
The effective tax rate for the third quarter of fiscal 2010 was 23.2 percent; the Company now expects the full-year tax rate to be in the range of 19 to 20 percent.
During the third quarter of 2010, the Company repurchased 1.2 million shares of its common stock at a cost of $67.7 million. The Company had $528.1 million available at June 30, 2010 under its $1.0 billion share repurchase authorization.
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Conference Call
A conference call to discuss our financial results will take place at 8:30 A.M. Eastern Time on July 28. The call and related financial charts will be webcast and accessible via the Rockwell Automation website (www.rockwellautomation.com).
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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, and the cyclical nature of our customers’ capital spending, all of which may affect demand for our offerings, and currency exchange rates; |
| • | laws, regulations and governmental policies affecting our activities in the countries where we do business; |
| • | 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; |
| • | disruption of our operations due to natural disasters, acts of war, strikes, terrorism 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; |
| • | the uncertainties of litigation; |
| • | disruption of our distribution channels; |
| • | the availability and price of components and materials; |
| • | successful execution of our cost productivity, restructuring 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 about 19,000 people serving customers in more than 80 countries.
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SALES AND EARNINGS INFORMATION
(in millions, except per share amounts)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Sales | ||||||||||||||||
| Architecture & Software (a) | $ | 553.9 | $ | 399.5 | $ | 1,539.1 | $ | 1,299.4 | ||||||||
| Control Products & Solutions (b) | 714.2 | 611.3 | 1,961.0 | 1,958.7 | ||||||||||||
| Total sales (c) | $ | 1,268.1 | $ | 1,010.8 | $ | 3,500.1 | $ | 3,258.1 | ||||||||
| Segment operating earnings | ||||||||||||||||
| Architecture & Software (d) | $ | 125.4 | $ | 43.3 | $ | 347.0 | $ | 186.1 | ||||||||
| Control Products & Solutions (e) | 72.6 | 43.0 | 165.1 | 164.0 | ||||||||||||
Total segment operating earnings1 (f) | 198.0 | 86.3 | 512.1 | 350.1 | ||||||||||||
| Purchase accounting depreciation and amortization | (4.6 | ) | (4.4 | ) | (14.2 | ) | (14.2 | ) | ||||||||
| General corporate — net | (23.1 | ) | (16.3 | ) | (66.2 | ) | (49.1 | ) | ||||||||
| Interest expense | (14.8 | ) | (15.4 | ) | (45.3 | ) | (45.7 | ) | ||||||||
| Special items | — | — | — | 4.0 | ||||||||||||
| Income from continuing operations before income taxes | 155.5 | 50.2 | 386.4 | 245.1 | ||||||||||||
| Income tax provision | (36.1 | ) | (17.4 | ) | (77.3 | ) | (56.1 | ) | ||||||||
| Income from continuing operations | 119.4 | 32.8 | 309.1 | 189.0 | ||||||||||||
| Income from discontinued operations | — | — | 23.9 | 2.8 | ||||||||||||
| Net income | $ | 119.4 | $ | 32.8 | $ | 333.0 | $ | 191.8 | ||||||||
| Diluted earnings per share | ||||||||||||||||
| Continuing operations | $ | 0.83 | $ | 0.23 | $ | 2.14 | $ | 1.33 | ||||||||
| Discontinued operations | — | — | 0.17 | 0.02 | ||||||||||||
| Net income | $ | 0.83 | $ | 0.23 | $ | 2.31 | $ | 1.35 | ||||||||
| Average diluted shares | 144.3 | 142.3 | 144.1 | 142.1 | ||||||||||||
| Segment operating margin | ||||||||||||||||
| Architecture & Software (d/a) | 22.6 | % | 10.8 | % | 22.5 | % | 14.3 | % | ||||||||
| Control Products & Solutions (e/b) | 10.2 | % | 7.0 | % | 8.4 | % | 8.4 | % | ||||||||
Total segment operating margin1 (f/c) | 15.6 | % | 8.5 | % | 14.6 | % | 10.7 | % | ||||||||
| 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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CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(in millions)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Sales | $ | 1,268.1 | $ | 1,010.8 | $ | 3,500.1 | $ | 3,258.1 | ||||||||
| Cost of sales | (760.8 | ) | (640.6 | ) | (2,092.9 | ) | (2,053.9 | ) | ||||||||
| Gross profit | 507.3 | 370.2 | 1,407.2 | 1,204.2 | ||||||||||||
| Selling, general and administrative expenses | (333.3 | ) | (305.0 | ) | (969.0 | ) | (911.2 | ) | ||||||||
| Other (expense) income | (3.7 | ) | 0.4 | (6.5 | ) | (2.2 | ) | |||||||||
| Interest expense | (14.8 | ) | (15.4 | ) | (45.3 | ) | (45.7 | ) | ||||||||
| Income from continuing operations before income taxes | 155.5 | 50.2 | 386.4 | 245.1 | ||||||||||||
| Income tax provision | (36.1 | ) | (17.4 | ) | (77.3 | ) | (56.1 | ) | ||||||||
Income from continuing operations | 119.4 | 32.8 | 309.1 | 189.0 | ||||||||||||
| Income from discontinued operations | — | — | 23.9 | 2.8 | ||||||||||||
Net income | $ | 119.4 | $ | 32.8 | $ | 333.0 | $ | 191.8 | ||||||||
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CONDENSED BALANCE SHEET INFORMATION
(in millions)
| June 30, | September 30, | |||||||
| 2010 | 2009 | |||||||
Assets | ||||||||
| Cash and cash equivalents | $ | 826.0 | $ | 643.8 | ||||
| Receivables | 826.4 | 726.3 | ||||||
| Inventories | 576.5 | 436.4 | ||||||
| Property, net | 513.0 | 532.5 | ||||||
| Goodwill and intangibles | 1,096.3 | 1,144.1 | ||||||
| Other assets | 776.3 | 822.6 | ||||||
| Total | $ | 4,614.5 | $ | 4,305.7 | ||||
Liabilities and Shareowners’ Equity | ||||||||
| Accounts payable | 398.4 | $ | 313.3 | |||||
| Long-term debt | 904.8 | 904.7 | ||||||
| Other liabilities | 1,935.3 | 1,771.3 | ||||||
| Shareowners’ equity | 1,376.0 | 1,316.4 | ||||||
| Total | $ | 4,614.5 | $ | 4,305.7 | ||||
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CONDENSED CASH FLOW INFORMATION
(in millions)
| Nine Months Ended | ||||||||
| June 30, | ||||||||
| 2010 | 2009 | |||||||
Continuing operations: | ||||||||
Operating activities: | ||||||||
| Income from continuing operations | $ | 309.1 | $ | 189.0 | ||||
| Depreciation and amortization | 94.2 | 98.8 | ||||||
| Retirement benefits expense | 66.6 | 36.4 | ||||||
| Pension trust contributions | (21.9 | ) | (22.7 | ) | ||||
| Receivables/inventories/payables | (197.8 | ) | 172.4 | |||||
| Compensation and benefits | 115.0 | (56.8 | ) | |||||
| Income taxes | 22.2 | (5.8 | ) | |||||
| Other | 46.0 | (2.7 | ) | |||||
| Cash provided by operating activities | 433.4 | 408.6 | ||||||
Investing activities: | ||||||||
| Capital expenditures | (54.2 | ) | (67.5 | ) | ||||
| Acquisition of businesses, net of cash acquired | — | (30.1 | ) | |||||
| Proceeds from sale of property and short-term investments | 4.5 | 3.0 | ||||||
| Purchases of short-term investments | — | (8.4 | ) | |||||
| Other investing activities | — | (4.1 | ) | |||||
| Cash used for investing activities | (49.7 | ) | (107.1 | ) | ||||
Financing activities: | ||||||||
| Net repayment of debt | — | (100.0 | ) | |||||
| Cash dividends | (124.0 | ) | (123.3 | ) | ||||
| Purchases of treasury stock | (90.4 | ) | (53.5 | ) | ||||
| Proceeds from the exercise of stock options | 28.7 | 7.4 | ||||||
| Excess income tax benefit from share-based compensation | 12.3 | 1.3 | ||||||
| Other financing activities | (0.3 | ) | (3.0 | ) | ||||
| Cash used for financing activities | (173.7 | ) | (271.1 | ) | ||||
| Effect of exchange rate changes on cash | (27.6 | ) | (31.6 | ) | ||||
| Cash provided by (used for) continuing operations | 182.4 | (1.2 | ) | |||||
Discontinued operations: | ||||||||
| Cash used for discontinued operations | (0.2 | ) | (0.5 | ) | ||||
| Increase (decrease) in cash and cash equivalents | $ | 182.2 | $ | (1.7 | ) | |||
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OTHER SUPPLEMENTAL INFORMATION
(in millions)
| Three Months Ended June 30, | ||||||||||||||||||||||||
| 2010 | 2009 | |||||||||||||||||||||||
| Sales | ||||||||||||||||||||||||
| Excluding | ||||||||||||||||||||||||
| Effect of | Effect of | |||||||||||||||||||||||
| Changes in | Changes in | Effect of | Organic | |||||||||||||||||||||
| Sales | Currency | Currency | Acquisitions | Sales | Sales | |||||||||||||||||||
| United States | $ | 658.7 | $ | (1.6 | ) | $ | 657.1 | $ | — | $ | 657.1 | $ | 518.2 | |||||||||||
| Canada | 88.2 | (9.8 | ) | 78.4 | — | 78.4 | 60.3 | |||||||||||||||||
| Europe, Middle East, Africa | 240.3 | 14.6 | 254.9 | — | 254.9 | 219.3 | ||||||||||||||||||
| Asia-Pacific | 186.1 | (8.7 | ) | 177.4 | — | 177.4 | 144.7 | |||||||||||||||||
| Latin America | 94.8 | 0.6 | 95.4 | — | 95.4 | 68.3 | ||||||||||||||||||
| Total | $ | 1,268.1 | $ | (4.9 | ) | $ | 1,263.2 | $ | — | $ | 1,263.2 | $ | 1,010.8 | |||||||||||
| Nine Months Ended June 30, | ||||||||||||||||||||||||
| 2010 | 2009 | |||||||||||||||||||||||
| Sales | ||||||||||||||||||||||||
| Excluding | ||||||||||||||||||||||||
| Effect of | Effect of | |||||||||||||||||||||||
| Changes in | Changes in | Effect of | Organic | |||||||||||||||||||||
| Sales | Currency | Currency | Acquisitions | Sales | Sales | |||||||||||||||||||
| United States | $ | 1,778.3 | $ | (5.9 | ) | $ | 1,772.4 | $ | (1.5 | ) | $ | 1,770.9 | $ | 1,697.7 | ||||||||||
| Canada | 239.2 | (30.5 | ) | 208.7 | (12.2 | ) | 196.5 | 188.6 | ||||||||||||||||
| Europe, Middle East, Africa | 714.6 | (25.4 | ) | 689.2 | — | 689.2 | 712.5 | |||||||||||||||||
| Asia-Pacific | 512.3 | (36.6 | ) | 475.7 | (2.7 | ) | 473.0 | 420.3 | ||||||||||||||||
| Latin America | 255.7 | (9.6 | ) | 246.1 | — | 246.1 | 239.0 | |||||||||||||||||
| Total | $ | 3,500.1 | $ | (108.0 | ) | $ | 3,392.1 | $ | (16.4 | ) | $ | 3,375.7 | $ | 3,258.1 | ||||||||||
| Three Months Ended June 30, | ||||||||||||||||||||||||
| 2010 | 2009 | |||||||||||||||||||||||
| Sales | ||||||||||||||||||||||||
| Excluding | ||||||||||||||||||||||||
| Effect of | Effect of | |||||||||||||||||||||||
| Changes in | Changes in | Effect of | Organic | |||||||||||||||||||||
| Sales | Currency | Currency | Acquisitions | Sales | Sales | |||||||||||||||||||
| Architecture & Software | $ | 553.9 | $ | (1.0 | ) | $ | 552.9 | $ | — | $ | 552.9 | $ | 399.5 | |||||||||||
| Control Products & Solutions | 714.2 | (3.9 | ) | 710.3 | — | 710.3 | 611.3 | |||||||||||||||||
| Total | $ | 1,268.1 | $ | (4.9 | ) | $ | 1,263.2 | $ | — | $ | 1,263.2 | $ | 1,010.8 | |||||||||||
| Nine Months Ended June 30, | ||||||||||||||||||||||||
| 2010 | 2009 | |||||||||||||||||||||||
| Sales | ||||||||||||||||||||||||
| Excluding | ||||||||||||||||||||||||
| Effect of | Effect of | |||||||||||||||||||||||
| Changes in | Changes in | Effect of | Organic | |||||||||||||||||||||
| Sales | Currency | Currency | Acquisitions | Sales | Sales | |||||||||||||||||||
| Architecture & Software | $ | 1,539.1 | $ | (52.1 | ) | $ | 1,487.0 | $ | — | $ | 1,487.0 | $ | 1,299.4 | |||||||||||
| Control Products & Solutions | 1,961.0 | (55.9 | ) | 1,905.1 | (16.4 | ) | 1,888.7 | 1,958.7 | ||||||||||||||||
| Total | $ | 3,500.1 | $ | (108.0 | ) | $ | 3,392.1 | $ | (16.4 | ) | $ | 3,375.7 | $ | 3,258.1 | ||||||||||
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OTHER SUPPLEMENTAL INFORMATION
(in millions)
| Quarter Ended | ||||||||||||||||||||||||||||
| Dec. 31, | March 31, | June 30, | Sept. 30, | Dec. 31, | March 31, | June 30, | ||||||||||||||||||||||
| 2008 | 2009 | 2009 | 2009 | 2009 | 2010 | 2010 | ||||||||||||||||||||||
| Cash provided by continuing operating activities | $ | 48.8 | $ | 169.9 | $ | 189.9 | $ | 117.8 | $ | 119.4 | $ | 178.5 | $ | 135.5 | ||||||||||||||
| Capital expenditures of continuing operations | (27.4 | ) | (18.3 | ) | (21.8 | ) | (30.5 | ) | (13.5 | ) | (17.0 | ) | (23.7 | ) | ||||||||||||||
| Excess income tax benefit from share-based compensation | 0.4 | 0.5 | 0.4 | 1.1 | 2.1 | 5.3 | 4.9 | |||||||||||||||||||||
| Free cash flow | $ | 21.8 | $ | 152.1 | $ | 168.5 | $ | 88.4 | $ | 108.0 | $ | 166.8 | $ | 116.7 | ||||||||||||||
| Twelve Months Ended | ||||||||
| June 30, | ||||||||
| 2010 | 2009 | |||||||
(a) Return | ||||||||
| Income from continuing operations | $ | 338.0 | $ | 314.6 | ||||
| Interest expense | 60.5 | 61.8 | ||||||
| Income tax provision | 77.2 | 107.2 | ||||||
| Purchase accounting depreciation and amortization | 18.6 | 19.3 | ||||||
| Special items | — | 42.7 | ||||||
| Return | 494.3 | 545.6 | ||||||
(b) Average invested capital | ||||||||
| Short-term debt | — | 136.9 | ||||||
| Long-term debt | 904.8 | 904.5 | ||||||
| Shareowners’ equity | 1,417.3 | 1,679.6 | ||||||
| Accumulated amortization of goodwill and intangibles | 671.2 | 641.1 | ||||||
| Cash and cash equivalents | (716.8 | ) | (608.4 | ) | ||||
| Average invested capital | 2,276.5 | 2,753.7 | ||||||
(c) Effective tax rate | ||||||||
| Income tax provision | 77.2 | 107.2 | ||||||
| Income from continuing operations before income taxes | $ | 415.2 | $ | 421.8 | ||||
| Effective tax rate | 18.6 | % | 25.4 | % | ||||
(a) / (b) * (1-c) Return On Invested Capital | 17.7 | % | 14.8 | % | ||||
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