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 Fourth Quarter 2010 Results
| • | Revenue up 26 percent year over year |
| • | Diluted EPS of $0.91 |
| • | Company provides fiscal 2011 diluted EPS guidance of $3.80 — $4.20 |
MILWAUKEE (November 9, 2010) – Rockwell Automation, Inc. (NYSE: ROK) today reported fiscal 2010 fourth quarter revenue of $1,356.9 million, up 26 percent compared to $1,074.4 million in the fourth quarter of fiscal 2009. Currency translation negatively impacted revenue growth by 1 percentage point. Fiscal 2010 fourth quarter net income was $131.3 million or $0.91 per share, compared to $28.9 million or $0.20 per share in the fourth quarter of fiscal 2009.
Total segment operating earnings were $205.1 million in the fourth quarter of fiscal 2010, up from $79.6 million in the same period of 2009. Total segment operating margin in the fourth quarter of fiscal 2010 increased to 15.1 percent from 7.4 percent a year ago, primarily due to higher segment operating margin in the Architecture & Software segment.
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Free cash flow was $19.2 million in the fourth quarter of fiscal 2010 after a discretionary pre-tax contribution of $150 million to the company’s U.S. pension trust.
Full Fiscal Year 2010
Sales for the full fiscal year were $4,857.0 million, up 12 percent compared to $4,332.5 million in fiscal 2009. Foreign currency translation contributed 2 percentage points to the increase. Income from continuing operations was $440.4 million or $3.05 per share, compared to $217.9 million or $1.53 per share in fiscal 2009. Segment operating earnings were $717.2 million, up 67 percent compared to $429.7 million in fiscal 2009. Full fiscal year 2010 free cash flow from continuing operations was $410.7 million, after the previously-mentioned pension contribution in the fourth quarter. Return on invested capital was 22.8 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.
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Commenting on the results, Keith D. Nosbusch, chairman and chief executive officer, said, “We capped the year with another quarter of strong revenue growth in all regions. I was particularly pleased to see very strong year-over-year growth again this quarter in China and India and strong sequential growth in Latin America and Europe. Logix grew 36 percent in the quarter.
“Our results confirm that our growth and performance strategy is working. For the full year, we grew revenue 12 percent and doubled earnings per share compared to fiscal 2009. Operating margin improved by 5 points, a great result in light of the compensation cost headwinds and growth investments we made in the second half of the year. Strong cash flow during the year enabled us to resume share repurchases, increase the dividend by 21 percent and make a $150 million discretionary U.S. pension contribution. We ended the year with a very strong balance sheet.
“Our performance this year is evidence that we are executing well as the recovery progresses and I want to thank our employees, customers and partners for their support throughout the year.”
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Outlook
Commenting on the outlook, Nosbusch added, “We believe that the global economic recovery will continue in fiscal 2011. We are starting to see signs that large capital project spending will improve, but timing remains somewhat uncertain. The growth investments we made in 2010 improve our ability to outperform the market in 2011 and beyond. For fiscal 2011 we are projecting revenue growth of 8 to12 percent excluding currency, plus 1 percent growth from currency translation. Based on this revenue outlook, we are providing fiscal 2011 earnings per share guidance of $3.80 to $4.20.”
Nosbusch continued, “Increased exposure to mid- and late-cycle markets should help as the recovery continues. Our strong balance sheet positions us to fund organic growth, make catalytic acquisitions and return capital to shareowners. Our strategy is to capitalize on expanded growth opportunities and technology differentiation. We remain committed to innovation, deepening our domain expertise and thought leadership – all key ingredients for helping our customers achieve their productivity and sustainability goals.”
Following is a discussion of fourth quarter results for both segments.
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Architecture & Software
Architecture & Software fiscal 2010 fourth quarter sales were $575.9 million, an increase of 36 percent from $424.1 million in the fourth quarter of fiscal 2009. Currency translation negatively impacted revenue growth by 2 percentage points. Fiscal 2010 fourth quarter sales were up 4 percent sequentially compared to $553.9 million in the third quarter of fiscal 2010. Segment operating earnings were $128.4 million in the fourth quarter of fiscal 2010 compared to $36.9 million in the fourth quarter of fiscal 2009. Architecture & Software segment operating margin was 22.3 percent in the fourth quarter of fiscal 2010 compared to 8.7 percent a year ago. Segment operating margin increased primarily due to volume leverage.
Control Products & Solutions
Control Products & Solutions fiscal 2010 fourth quarter sales were $781.0 million, an increase of 20 percent from $650.3 million in the fourth quarter of fiscal 2009. Currency translation negatively impacted revenue growth by 1 percentage point. Fiscal 2010 fourth quarter sales were up 9 percent sequentially compared to $714.2 million in the third quarter of this fiscal year. Segment operating earnings were $76.7 million in the fourth quarter of fiscal 2010, up from $42.7 million in the fourth quarter of fiscal 2009. Control Products & Solutions segment operating margin was 9.8 percent in the fourth quarter of fiscal 2010 compared to 6.6 percent a year ago. Segment operating margin increased primarily due to volume leverage.
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Other Information
Fiscal 2010 fourth quarter general corporate net expense was $27.4 million. General corporate net expense for the full year was $93.6 million compared to $80.3 million in 2009 with the increase primarily due to performance-based compensation.
The effective tax rate for the fourth quarter of fiscal 2010 was 16.8 percent. The effective tax rate for the full year was 19.1 percent compared to 20.4 percent in 2009.
During the fourth quarter of 2010, the Company repurchased 0.5 million shares of its common stock at a cost of $26.9 million. The Company had $501.2 million available at September 30, 2010 under its $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 November 9. 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, the cyclical nature of our customers’ capital spending, and currency exchange rates, all of which may affect our revenue and our profitability; |
| • | 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; |
| • | our ability to manage costs related to employee retirement and health care benefits; |
| • | 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 over 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 | Twelve Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Sales | ||||||||||||||||
| Architecture & Software (a) | $ | 575.9 | $ | 424.1 | $ | 2,115.0 | $ | 1,723.5 | ||||||||
| Control Products & Solutions (b) | 781.0 | 650.3 | 2,742.0 | 2,609.0 | ||||||||||||
| Total sales (c) | $ | 1,356.9 | $ | 1,074.4 | $ | 4,857.0 | $ | 4,332.5 | ||||||||
| Segment Operating Earnings | ||||||||||||||||
| Architecture & Software (d) | $ | 128.4 | $ | 36.9 | $ | 475.4 | $ | 223.0 | ||||||||
| Control Products & Solutions (e) | 76.7 | 42.7 | 241.8 | 206.7 | ||||||||||||
Total segment operating earnings1 (f) | 205.1 | 79.6 | 717.2 | 429.7 | ||||||||||||
| Purchase accounting depreciation and amortization | (4.7 | ) | (4.4 | ) | (18.9 | ) | (18.6 | ) | ||||||||
| General corporate — net | (27.4 | ) | (31.2 | ) | (93.6 | ) | (80.3 | ) | ||||||||
| Interest expense | (15.2 | ) | (15.2 | ) | (60.5 | ) | (60.9 | ) | ||||||||
| Special items | — | — | — | 4.0 | ||||||||||||
| Income from continuing operations before income taxes | 157.8 | 28.8 | 544.2 | 273.9 | ||||||||||||
| Income tax (provision) benefit | (26.5 | ) | 0.1 | (103.8 | ) | (56.0 | ) | |||||||||
| Income from continuing operations | 131.3 | 28.9 | 440.4 | 217.9 | ||||||||||||
| Income from discontinued operations | — | — | 23.9 | 2.8 | ||||||||||||
| Net income | $ | 131.3 | $ | 28.9 | $ | 464.3 | $ | 220.7 | ||||||||
| Diluted earnings per share | ||||||||||||||||
| Continuing operations | $ | 0.91 | $ | 0.20 | $ | 3.05 | $ | 1.53 | ||||||||
| Discontinued operations | — | — | 0.17 | 0.02 | ||||||||||||
| Net income | $ | 0.91 | $ | 0.20 | $ | 3.22 | $ | 1.55 | ||||||||
| Average diluted shares | 143.4 | 143.1 | 144.0 | 142.4 | ||||||||||||
| Segment operating margin | ||||||||||||||||
| Architecture & Software (d/a) | 22.3 | % | 8.7 | % | 22.5 | % | 12.9 | % | ||||||||
| Control Products & Solutions (e/b) | 9.8 | % | 6.6 | % | 8.8 | % | 7.9 | % | ||||||||
Total segment operating margin1 (f/c) | 15.1 | % | 7.4 | % | 14.8 | % | 9.9 | % | ||||||||
| 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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| Three Months Ended | Twelve Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Sales | $ | 1,356.9 | $ | 1,074.4 | $ | 4,857.0 | $ | 4,332.5 | ||||||||
| Cost of sales | (827.7 | ) | (709.1 | ) | (2,920.6 | ) | (2,763.0 | ) | ||||||||
| Gross profit | 529.2 | 365.3 | 1,936.4 | 1,569.5 | ||||||||||||
| Selling, general and administrative expenses | (354.3 | ) | (316.8 | ) | (1,323.3 | ) | (1,228.0 | ) | ||||||||
| Other expense | (1.9 | ) | (4.5 | ) | (8.4 | ) | (6.7 | ) | ||||||||
| Interest expense | (15.2 | ) | (15.2 | ) | (60.5 | ) | (60.9 | ) | ||||||||
| Income from continuing operations before income taxes | 157.8 | 28.8 | 544.2 | 273.9 | ||||||||||||
| Income tax (provision) benefit | (26.5 | ) | 0.1 | (103.8 | ) | (56.0 | ) | |||||||||
Income from continuing operations | 131.3 | 28.9 | 440.4 | 217.9 | ||||||||||||
Income from discontinued operations | — | — | 23.9 | 2.8 | ||||||||||||
Net income | $ | 131.3 | $ | 28.9 | $ | 464.3 | $ | 220.7 | ||||||||
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| September 30, | September 30, | |||||||
| 2010 | 2009 | |||||||
Assets | ||||||||
| Cash and cash equivalents | $ | 813.4 | $ | 643.8 | ||||
| Receivables | 859.0 | 726.3 | ||||||
| Inventories | 603.3 | 436.4 | ||||||
| Property, net | 536.9 | 532.5 | ||||||
| Goodwill and intangibles | 1,129.8 | 1,144.1 | ||||||
| Other assets | 805.9 | 822.6 | ||||||
| Total | $ | 4,748.3 | $ | 4,305.7 | ||||
Liabilities and Shareowners’ Equity | ||||||||
| Accounts payable | $ | 435.7 | $ | 313.3 | ||||
| Long-term debt | 904.9 | 904.7 | ||||||
| Other liabilities | 1,947.3 | 1,771.3 | ||||||
| Shareowners’ equity | 1,460.4 | 1,316.4 | ||||||
| Total | $ | 4,748.3 | $ | 4,305.7 | ||||
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| Twelve Months Ended | ||||||||
| September 30, | ||||||||
| 2010 | 2009 | |||||||
Continuing operations: | ||||||||
Operating activities: | ||||||||
| Income from continuing operations | $ | 440.4 | $ | 217.9 | ||||
| Depreciation and amortization | 127.3 | 134.1 | ||||||
| Retirement benefits expense | 89.1 | 48.5 | ||||||
| Pension trust contributions | (181.2 | ) | (28.8 | ) | ||||
| Receivables/inventories/payables | (180.9 | ) | 254.6 | |||||
| Compensation and benefits | 143.9 | (56.7 | ) | |||||
| Income taxes | 34.8 | (40.8 | ) | |||||
| Other | 20.6 | (2.4 | ) | |||||
| Cash provided by operating activities | 494.0 | 526.4 | ||||||
Investing activities: | ||||||||
| Capital expenditures | (99.4 | ) | (98.0 | ) | ||||
| Acquisition of businesses, net of cash acquired | — | (30.7 | ) | |||||
| Proceeds from sale of property and business | 6.3 | 4.0 | ||||||
| Proceeds from sales of available for sale securities and short-term investments | 4.1 | 4.8 | ||||||
| Purchases of short-term investments | — | (8.4 | ) | |||||
| Other investing activities | — | (4.1 | ) | |||||
| Cash used for investing activities | (89.0 | ) | (132.4 | ) | ||||
Financing activities: | ||||||||
| Net repayment of debt | — | (100.0 | ) | |||||
| Cash dividends | (173.6 | ) | (164.5 | ) | ||||
| Purchases of treasury stock | (118.8 | ) | (53.5 | ) | ||||
| Proceeds from the exercise of stock options | 35.2 | 11.3 | ||||||
| Excess income tax benefit from share-based compensation | 16.1 | 2.4 | ||||||
| Other financing activities | (0.3 | ) | (3.1 | ) | ||||
| Cash used for financing activities | (241.4 | ) | (307.4 | ) | ||||
| Effect of exchange rate changes on cash | 6.8 | (24.5 | ) | |||||
| Cash provided by continuing operations | 170.4 | 62.1 | ||||||
Discontinued Operations: | ||||||||
| Cash used for discontinued operations | (0.8 | ) | (0.5 | ) | ||||
| Increase in cash and cash equivalents | $ | 169.6 | $ | 61.6 | ||||
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| Three Months Ended September 30, | ||||||||||||||||||||||||
| 2010 | 2009 | |||||||||||||||||||||||
| Sales | ||||||||||||||||||||||||
| Excluding | ||||||||||||||||||||||||
| Effect of | Effect of | |||||||||||||||||||||||
| Changes in | Changes in | Effect of | Organic | |||||||||||||||||||||
| Sales | Currency | Currency | Acquisitions | Sales | Sales | |||||||||||||||||||
| United States | $ | 677.9 | $ | (1.3 | ) | $ | 676.6 | $ | — | $ | 676.6 | $ | 511.5 | |||||||||||
| Canada | 81.8 | (4.2 | ) | 77.6 | — | 77.6 | 68.5 | |||||||||||||||||
| Europe, Middle East, Africa | 272.7 | 24.2 | 296.9 | — | 296.9 | 249.6 | ||||||||||||||||||
| Asia-Pacific | 212.0 | (7.1 | ) | 204.9 | — | 204.9 | 159.0 | |||||||||||||||||
| Latin America | 112.5 | 0.6 | 113.1 | — | 113.1 | 85.8 | ||||||||||||||||||
| Total | $ | 1,356.9 | $ | 12.2 | $ | 1,369.1 | $ | — | $ | 1,369.1 | $ | 1,074.4 | ||||||||||||
| Twelve Months Ended September 30, | ||||||||||||||||||||||||
| 2010 | 2009 | |||||||||||||||||||||||
| Sales | ||||||||||||||||||||||||
| Excluding | ||||||||||||||||||||||||
| Effect of | Effect of | |||||||||||||||||||||||
| Changes in | Changes in | Effect of | Organic | |||||||||||||||||||||
| Sales | Currency | Currency | Acquisitions | Sales | Sales | |||||||||||||||||||
| United States | $ | 2,456.2 | $ | (7.2 | ) | $ | 2,449.0 | $ | (1.5 | ) | $ | 2,447.5 | $ | 2,209.2 | ||||||||||
| Canada | 321.0 | (34.7 | ) | 286.3 | (12.2 | ) | 274.1 | 257.1 | ||||||||||||||||
| Europe, Middle East, Africa | 987.3 | (1.2 | ) | 986.1 | — | 986.1 | 962.1 | |||||||||||||||||
| Asia-Pacific | 724.3 | (43.7 | ) | 680.6 | (2.7 | ) | 677.9 | 579.3 | ||||||||||||||||
| Latin America | 368.2 | (9.0 | ) | 359.2 | — | 359.2 | 324.8 | |||||||||||||||||
| Total | $ | 4,857.0 | $ | (95.8 | ) | $ | 4,761.2 | $ | (16.4 | ) | $ | 4,744.8 | $ | 4,332.5 | ||||||||||
| Three Months Ended September 30, | ||||||||||||||||||||||||
| 2010 | 2009 | |||||||||||||||||||||||
| Sales | ||||||||||||||||||||||||
| Excluding | ||||||||||||||||||||||||
| Effect of | Effect of | |||||||||||||||||||||||
| Changes in | Changes in | Effect of | Organic | |||||||||||||||||||||
| Sales | Currency | Currency | Acquisitions | Sales | Sales | |||||||||||||||||||
| Architecture & Software | $ | 575.9 | $ | 7.9 | $ | 583.8 | $ | — | $ | 583.8 | $ | 424.1 | ||||||||||||
| Control Products & Solutions | 781.0 | 4.3 | 785.3 | — | 785.3 | 650.3 | ||||||||||||||||||
| Total | $ | 1,356.9 | $ | 12.2 | $ | 1,369.1 | $ | — | $ | 1,369.1 | $ | 1,074.4 | ||||||||||||
| Twelve Months Ended September 30, | ||||||||||||||||||||||||
| 2010 | 2009 | |||||||||||||||||||||||
| Sales | ||||||||||||||||||||||||
| Excluding | ||||||||||||||||||||||||
| Effect of | Effect of | |||||||||||||||||||||||
| Changes in | Changes in | Effect of | Organic | |||||||||||||||||||||
| Sales | Currency | Currency | Acquisitions | Sales | Sales | |||||||||||||||||||
| Architecture & Software | $ | 2,115.0 | $ | (44.2 | ) | $ | 2,070.8 | $ | — | $ | 2,070.8 | $ | 1,723.5 | |||||||||||
| Control Products & Solutions | 2,742.0 | (51.6 | ) | 2,690.4 | (16.4 | ) | 2,674.0 | 2,609.0 | ||||||||||||||||
| Total | $ | 4,857.0 | $ | (95.8 | ) | $ | 4,761.2 | $ | (16.4 | ) | $ | 4,744.8 | $ | 4,332.5 | ||||||||||
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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, | Sept. 30, | |||||||||||||||||||||||||
| 2008 | 2009 | 2009 | 2009 | 2009 | 2010 | 2010 | 2010 | |||||||||||||||||||||||||
| Cash provided by continuing operating activities | $ | 48.8 | $ | 169.9 | $ | 189.9 | $ | 117.8 | $ | 119.4 | $ | 178.5 | $ | 135.5 | $ | 60.6 | ||||||||||||||||
| Capital expenditures of continuing operations | (27.4 | ) | (18.3 | ) | (21.8 | ) | (30.5 | ) | (13.5 | ) | (17.0 | ) | (23.7 | ) | (45.2 | ) | ||||||||||||||||
| Excess income tax benefit from share-based compensation | 0.4 | 0.5 | 0.4 | 1.1 | 2.1 | 5.3 | 4.9 | 3.8 | ||||||||||||||||||||||||
Free cash flow1 | $ | 21.8 | $ | 152.1 | $ | 168.5 | $ | 88.4 | $ | 108.0 | $ | 166.8 | $ | 116.7 | $ | 19.2 | ||||||||||||||||
| 1 | Free cash flow for the fourth quarter of 2010 included a discretionary pre-tax contribution of $150 million to the company’s U.S. pension trust in September. |
| Twelve Months Ended | ||||||||
| September 30, | ||||||||
| 2010 | 2009 | |||||||
(a) Return | ||||||||
| Income from continuing operations | $ | 440.4 | $ | 217.9 | ||||
| Interest expense | 60.5 | 60.9 | ||||||
| Income tax provision | 103.8 | 56.0 | ||||||
| Purchase accounting depreciation and amortization | 18.9 | 18.6 | ||||||
| Special items | — | (4.0 | ) | |||||
| Return | 623.6 | 349.4 | ||||||
(b) Average invested capital | ||||||||
| Short-term debt | — | 70.1 | ||||||
| Long-term debt | 904.8 | 904.6 | ||||||
| Shareowners’ equity | 1,387.9 | 1,563.5 | ||||||
| Accumulated amortization of goodwill and intangibles | 679.4 | 648.3 | ||||||
| Cash and cash equivalents | (763.3 | ) | (576.0 | ) | ||||
| Average invested capital | 2,208.8 | 2,610.5 | ||||||
(c) Effective tax rate | ||||||||
| Income tax provision | 103.8 | 56.0 | ||||||
| Income from continuing operations before income taxes | $ | 544.2 | $ | 273.9 | ||||
| Effective tax rate | 19.1 | % | 20.4 | % | ||||
(a) / (b) * (1-c) Return On Invested Capital | 22.8 | % | 10.7 | % | ||||
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