Exhibit 99
1201 S. Second Street
Milwaukee, WI 53204
USA
Fax: 414.382.5560
News Release |
Contact | John Bernaden Media Relations Rockwell Automation 414.382.2555 | Rondi Rohr-Dralle Investor Relations Rockwell Automation 414.382.8510 |
Rockwell Automation Reports Second Quarter 2009 Results
• | Organic sales down 18 percent; total sales down 25 percent |
• | Diluted EPS of $0.29 |
• | Company revises fiscal 2009 EPS guidance to $1.40 — $1.70 |
MILWAUKEE (April 29, 2009) – Rockwell Automation, Inc. (NYSE: ROK) today reported fiscal 2009 second quarter revenue of $1,058.1 million, down 25 percent compared to $1,406.6 million in the second quarter of fiscal 2008. Organic sales declined 18 percent, and currency translation contributed an additional 7 percentage points to the total decline. Fiscal 2009 second quarter net income was $40.6 million or $0.29 per share, compared to $0.96 per share in the second quarter of fiscal 2008.
Segment operating earnings were $86.2 million in the second quarter of fiscal 2009, down from $240.3 million in the same period of 2008. Earnings decreased primarily due to the significant revenue decline. Earnings were also lower due to pre-tax restructuring charges of approximately $20 million and unfavorable mix, partially offset by cost reductions. Segment operating margin in the second quarter of fiscal 2009 was 8.1 percent, 9.0 percentage points lower than the second quarter of fiscal 2008.
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Second quarter of fiscal 2009 free cash flow from continuing operations was $152.1 million versus $31.8 million in the second quarter of fiscal 2008. Free cash flow in the quarter benefited primarily from working capital reductions, as well as lower capital expenditures and a refund related to a contractual tax matter. Return on invested capital was 18.7 percent.
Organic sales, free cash flow and return on invested capital are non-GAAP measures that are defined in the attachments to this release under “Other Supplemental Information”.
Commenting on the results, Keith D. Nosbusch, chairman and chief executive officer said, “Our second quarter results reflect the severity of the global economic recession. Market conditions quickly deteriorated across most industries and all regions. With a sharper revenue decline in the quarter than we expected, we continued to aggressively adjust our cost structure. We made significant progress on our cost reduction actions in the quarter and expect to deliver savings for fiscal year 2009 above the original $240 million target. We also generated strong free cash flow in the quarter, primarily through our intense focus on working capital management. I am proud of how well our employees have responded in this challenging environment. Despite making personal sacrifices, they have not wavered in their commitment to our business priorities and dedication to our customers.”
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Outlook
Commenting on the outlook, Nosbusch added, “While there are signs that economic and market conditions may be stabilizing, it is still too early to call a bottom. We believe that the steepest sequential declines are behind us, but markets remain uncertain and our revenue trends are mixed across the regions. We are managing our business assuming that sales volume in the second half of the fiscal year will be somewhat below the second quarter run rate. We continue to evolve our cost structure and expect to implement additional cost actions in the remainder of the fiscal year. Given this outlook, we now expect revenue to decline between 16 and 18 percent in fiscal 2009, excluding the effects of currency. Accordingly, we are revising our fiscal 2009 earnings guidance downward to a range of $1.40 to $1.70 per share, excluding any restructuring charges related to actions that we may take in the remainder of the fiscal year.”
Nosbusch added, “In spite of the difficult business environment, we will balance near-term financial performance with protecting our intellectual capital and core technology investments. Our strong balance sheet and liquidity position provide the financial flexibility needed to manage through this economic cycle without compromising our long-term strategy. We are confident that we will execute through the downturn and emerge even more competitive when markets recover.”
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Following is a discussion of second quarter results for each of the segments.
Architecture & Software
Architecture & Software fiscal 2009 second quarter sales were $393.5 million, a decrease of 34 percent from $599.0 million in the second quarter of fiscal 2008. Currency translation contributed 6 percentage points to the decline. Segment operating earnings were $33.2 million in the second quarter of fiscal 2009 compared to $139.9 million in the second quarter of fiscal 2008. Architecture & Software segment operating margin was 8.4 percent in the second quarter of fiscal 2009 compared to 23.4 percent in the same period of 2008.
Control Products & Solutions
Control Products & Solutions fiscal 2009 second quarter sales were $664.6 million, a decrease of 18 percent from $807.6 million in the second quarter of fiscal 2008. Currency translation contributed 8 percentage points to the decline. Segment operating earnings were $53.0 million in the second quarter of fiscal 2009 compared to $100.4 million in the second quarter of fiscal 2008. Control Products & Solutions segment operating margin was 8.0 percent in the second quarter of fiscal 2009 compared to 12.4 percent in the same period of 2008. In the second quarter of fiscal 2009, we closed two acquisitions based in China and Canada that enhance our global domain expertise in process solutions.
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General Corporate – Net
Fiscal 2009 second quarter general corporate net expense was $14.7 million compared to $16.6 million in the second quarter of fiscal 2008.
Income Taxes
The effective tax rate for the second quarter of fiscal 2009 was 26.7 percent, compared to 28.5 percent for the second quarter of fiscal 2008. For fiscal 2009, the Company now expects the full year tax rate to be in the range of 21 to 24 percent, subject to quarterly variability.
Liquidity
The Company secured two new credit facilities in the second quarter of fiscal 2009 aggregating to $535 million, split equally between a 364-day facility and a 3-year facility. No shares were purchased in the quarter under the existing repurchase authorization.
Conference Call
A conference call to discuss our financial results will take place at 8:30 A.M. Eastern Time on April 29. 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:
• | economic changes in global markets where we compete, such as currency exchange rates, inflation rates, recession, interest rates and the volatility and disruption of the capital and credit markets for us, our customers and our suppliers; |
• | 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; |
• | general global and regional economic, business or industry conditions, including levels of capital spending in industrial markets; |
• | 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; |
• | the ability of our divested businesses to satisfy certain obligations that they have assumed; |
• | successful execution of our cost productivity, restructuring and globalization initiatives; |
• | our ability to execute strategic actions, including acquisitions and integration of acquired businesses; 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 20,000 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 | Six Months Ended | |||||||||||||||
March 31, | March 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Sales | ||||||||||||||||
Architecture & Software | $ | 393.5 | $ | 599.0 | $ | 899.9 | $ | 1,176.9 | ||||||||
Control Products & Solutions | 664.6 | 807.6 | 1,347.4 | 1,561.6 | ||||||||||||
Total sales | $ | 1,058.1 | $ | 1,406.6 | $ | 2,247.3 | $ | 2,738.5 | ||||||||
Segment operating earnings | ||||||||||||||||
Architecture & Software | $ | 33.2 | $ | 139.9 | $ | 142.8 | $ | 288.4 | ||||||||
Control Products & Solutions | 53.0 | 100.4 | 121.0 | 209.4 | ||||||||||||
Total segment operating earnings | 86.2 | 240.3 | 263.8 | 497.8 | ||||||||||||
Purchase accounting depreciation and amortization | (4.8 | ) | (6.5 | ) | (9.8 | ) | (12.8 | ) | ||||||||
General corporate – net | (14.7 | ) | (16.6 | ) | (32.8 | ) | (30.8 | ) | ||||||||
Interest expense | (15.3 | ) | (17.5 | ) | (30.3 | ) | (35.5 | ) | ||||||||
Special items | 4.0 | — | 4.0 | — | ||||||||||||
Income from continuing operations before income taxes | 55.4 | 199.7 | 194.9 | 418.7 | ||||||||||||
Income tax provision | (14.8 | ) | (56.9 | ) | (38.7 | ) | (119.3 | ) | ||||||||
Income from continuing operations | 40.6 | 142.8 | 156.2 | 299.4 | ||||||||||||
Income from discontinued operations | — | — | 2.8 | — | ||||||||||||
Net income | $ | 40.6 | $ | 142.8 | $ | 159.0 | $ | 299.4 | ||||||||
Diluted earnings per share | ||||||||||||||||
Continuing operations | $ | 0.29 | $ | 0.96 | $ | 1.10 | $ | 2.00 | ||||||||
Discontinued operations | — | — | 0.02 | — | ||||||||||||
Net income | $ | 0.29 | $ | 0.96 | $ | 1.12 | $ | 2.00 | ||||||||
Average diluted shares | 142.1 | 148.7 | 142.1 | 149.9 | ||||||||||||
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CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(in millions)
Three Months Ended | Six Months Ended | |||||||||||||||
March 31, | March 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Sales | $ | 1,058.1 | $ | 1,406.6 | $ | 2,247.3 | $ | 2,738.5 | ||||||||
Cost of sales | (694.5 | ) | (835.3 | ) | (1,413.3 | ) | (1,591.7 | ) | ||||||||
Gross profit | 363.6 | 571.3 | 834.0 | 1,146.8 | ||||||||||||
Selling, general and administrative expenses | (292.8 | ) | (358.3 | ) | (606.2 | ) | (706.9 | ) | ||||||||
Other (expense) income | (0.1 | ) | 4.2 | (2.6 | ) | 14.3 | ||||||||||
Interest expense | (15.3 | ) | (17.5 | ) | (30.3 | ) | (35.5 | ) | ||||||||
Income from continuing operations | 55.4 | 199.7 | 194.9 | 418.7 | ||||||||||||
Income tax provision | (14.8 | ) | (56.9 | ) | (38.7 | ) | (119.3 | ) | ||||||||
Income from continuing operations | 40.6 | 142.8 | 156.2 | 299.4 | ||||||||||||
Income from discontinued operations | — | — | 2.8 | — | ||||||||||||
Net income | $ | 40.6 | $ | 142.8 | $ | 159.0 | $ | 299.4 | ||||||||
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CONDENSED BALANCE SHEET INFORMATION
(in millions)
March 31, | September 30, | |||||||
2009 | 2008 | |||||||
Assets | ||||||||
Cash and cash equivalents | $ | 519.5 | $ | 582.2 | ||||
Receivables | 748.1 | 959.9 | ||||||
Inventories | 528.3 | 575.5 | ||||||
Property, net | 532.7 | 553.8 | ||||||
Goodwill and intangibles | 1,108.4 | 1,165.8 | ||||||
Other assets | 738.7 | 756.4 | ||||||
Total | $ | 4,175.7 | $ | 4,593.6 | ||||
Liabilities and Shareowners’ Equity | ||||||||
Short-term debt | $ | 75.1 | $ | 100.1 | ||||
Accounts payable | 299.0 | 437.3 | ||||||
Long-term debt | 904.7 | 904.4 | ||||||
Other liabilities | 1,310.8 | 1,463.0 | ||||||
Shareowners’ equity | 1,586.1 | 1,688.8 | ||||||
Total | $ | 4,175.7 | $ | 4,593.6 | ||||
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CONDENSED CASH FLOW INFORMATION
(in millions)
Six Months Ended | ||||||||
March 31, | ||||||||
2009 | 2008 | |||||||
Continuing operations: | ||||||||
Operating activities: | ||||||||
Income from continuing operations | $ | 156.2 | $ | 299.4 | ||||
Depreciation and amortization | 64.4 | 65.6 | ||||||
Retirement benefits expense | 23.4 | 22.3 | ||||||
Pension trust contributions | (14.2 | ) | (17.7 | ) | ||||
Receivables/inventories/payables | 77.5 | (121.7 | ) | |||||
Compensation and benefits | (73.6 | ) | (33.5 | ) | ||||
Other | (15.0 | ) | (54.3 | ) | ||||
Cash provided by operating activities | 218.7 | 160.1 | ||||||
Investing activities: | ||||||||
Capital expenditures | (45.7 | ) | (59.8 | ) | ||||
Acquisition of businesses, net of cash acquired | (29.5 | ) | (61.6 | ) | ||||
Proceeds from sale of property and securities | 2.9 | 42.8 | ||||||
Other investing activities | (4.1 | ) | (2.9 | ) | ||||
Cash used for investing activities | (76.4 | ) | (81.5 | ) | ||||
Financing activities: | ||||||||
Net (repayment) issuance of debt | (25.0 | ) | 289.4 | |||||
Cash dividends | (82.2 | ) | (85.9 | ) | ||||
Purchases of treasury stock | (53.5 | ) | (201.8 | ) | ||||
Proceeds from the exercise of stock options | 4.8 | 10.7 | ||||||
Excess income tax benefit from share-based compensation | 0.9 | 3.5 | ||||||
Other financing activities | (2.9 | ) | (0.2 | ) | ||||
Cash (used for) provided by financing activities | (157.9 | ) | 15.7 | |||||
Effect of exchange rate changes on cash | (46.8 | ) | 47.9 | |||||
Cash (used for) provided by continuing operations | (62.4 | ) | 142.2 | |||||
Discontinued operations: | ||||||||
Cash used for discontinued operations | (0.3 | ) | (5.7 | ) | ||||
(Decrease) increase in cash and cash equivalents | $ | (62.7 | ) | $ | 136.5 | |||
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OTHER SUPPLEMENTAL INFORMATION
(in millions)
Quarter Ended | ||||||||||||||||||||||||
Dec. 31, | March 31, | June 30, | Sept. 30, | Dec. 31, | March 31, | |||||||||||||||||||
2007 | 2008 | 2008 | 2008 | 2008 | 2009 | |||||||||||||||||||
Cash provided by continuing operating activities | $ | 101.5 | $ | 58.6 | $ | 192.2 | $ | 244.5 | 48.8 | 169.9 | ||||||||||||||
Capital expenditures of continuing operations | (26.3 | ) | (33.5 | ) | (43.0 | ) | (48.2 | ) | (27.4 | ) | (18.3 | ) | ||||||||||||
Tax payments related to the gain on divestiture of Power Systems | — | 6.1 | 1.6 | 0.2 | — | — | ||||||||||||||||||
Excess income tax benefit from share-based compensation | 2.9 | 0.6 | 0.4 | 0.7 | 0.4 | 0.5 | ||||||||||||||||||
Free cash flow | $ | 78.1 | $ | 31.8 | $ | 151.2 | $ | 197.2 | $ | 21.8 | $ | 152.1 | ||||||||||||
Three Months Ended March 31, | ||||||||||||||||||||||||
2009 | 2008 | |||||||||||||||||||||||
Sales | ||||||||||||||||||||||||
Excluding | ||||||||||||||||||||||||
Effect of | Effect of | |||||||||||||||||||||||
Changes in | Changes in | Effect of | Organic | |||||||||||||||||||||
Sales | Currency | Currency | Acquisitions | Sales | Sales | |||||||||||||||||||
United States | $ | 538.3 | $ | 5.2 | $ | 543.5 | $ | (0.4 | ) | $ | 543.1 | $ | 717.0 | |||||||||||
Canada | 62.2 | 14.7 | 76.9 | — | 76.9 | 96.9 | ||||||||||||||||||
Europe, Middle East, Africa | 244.4 | 40.8 | 285.2 | (1.4 | ) | 283.8 | 337.7 | |||||||||||||||||
Asia-Pacific | 133.3 | 17.9 | 151.2 | — | 151.2 | 165.5 | ||||||||||||||||||
Latin America | 79.9 | 20.3 | 100.2 | — | 100.2 | 89.5 | ||||||||||||||||||
Total | $ | 1,058.1 | $ | 98.9 | $ | 1,157.0 | $ | (1.8 | ) | $ | 1,155.2 | $ | 1,406.6 | |||||||||||
Six Months Ended March 31, | ||||||||||||||||||||||||
2009 | 2008 | |||||||||||||||||||||||
Sales | ||||||||||||||||||||||||
Excluding | ||||||||||||||||||||||||
Effect of | Effect of | |||||||||||||||||||||||
Changes in | Changes in | Effect of | Organic | |||||||||||||||||||||
Sales | Currency | Currency | Acquisitions | Sales | Sales | |||||||||||||||||||
United States | $ | 1,179.5 | $ | 10.5 | $ | 1,190.0 | $ | (2.8 | ) | $ | 1,187.2 | $ | 1,388.4 | |||||||||||
Canada | 128.3 | 30.8 | 159.1 | — | 159.1 | 192.1 | ||||||||||||||||||
Europe, Middle East, Africa | 493.2 | 70.1 | 563.3 | (3.4 | ) | 559.9 | 642.4 | |||||||||||||||||
Asia-Pacific | 275.6 | 36.3 | 311.9 | (0.1 | ) | 311.8 | 328.9 | |||||||||||||||||
Latin America | 170.7 | 36.4 | 207.1 | — | 207.1 | 186.7 | ||||||||||||||||||
Total | $ | 2,247.3 | $ | 184.1 | $ | 2,431.4 | $ | (6.3 | ) | $ | 2,425.1 | $ | 2,738.5 | |||||||||||
Three Months Ended March 31, | ||||||||||||||||||||||||
2009 | 2008 | |||||||||||||||||||||||
Sales | ||||||||||||||||||||||||
Excluding | ||||||||||||||||||||||||
Effect of | Effect of | |||||||||||||||||||||||
Changes in | Changes in | Effect of | Organic | |||||||||||||||||||||
Sales | Currency | Currency | Acquisitions | Sales | Sales | |||||||||||||||||||
Architecture & Software | $ | 393.5 | $ | 36.4 | $ | 429.9 | $ | (1.8 | ) | $ | 428.1 | $ | 599.0 | |||||||||||
Control Products & Solutions | 664.6 | 62.5 | 727.1 | — | 727.1 | 807.6 | ||||||||||||||||||
Total | $ | 1,058.1 | $ | 98.9 | $ | 1,157.0 | $ | (1.8 | ) | $ | 1,155.2 | $ | 1,406.6 | |||||||||||
Six Months Ended March 31, | ||||||||||||||||||||||||
2009 | 2008 | |||||||||||||||||||||||
Sales | ||||||||||||||||||||||||
Excluding | ||||||||||||||||||||||||
Effect of | Effect of | |||||||||||||||||||||||
Changes in | Changes in | Effect of | Organic | |||||||||||||||||||||
Sales | Currency | Currency | Acquisitions | Sales | Sales | |||||||||||||||||||
Architecture & Software | $ | 899.9 | $ | 72.2 | $ | 972.1 | $ | (6.3 | ) | $ | 965.8 | $ | 1,176.9 | |||||||||||
Control Products & Solutions | 1,347.4 | 111.9 | 1,459.3 | — | 1,459.3 | 1,561.6 | ||||||||||||||||||
Total | $ | 2,247.3 | $ | 184.1 | $ | 2,431.4 | $ | (6.3 | ) | $ | 2,425.1 | $ | 2,738.5 | |||||||||||
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OTHER SUPPLEMENTAL INFORMATION
(in millions)
Twelve Months Ended | ||||||||
March 31, | ||||||||
2009 | 2008 | |||||||
(a) Return | ||||||||
Income from continuing operations | $ | 434.4 | $ | 630.7 | ||||
Interest expense | 63.0 | 64.2 | ||||||
Income tax provision | 150.7 | 246.3 | ||||||
Purchase accounting depreciation and amortization | 21.2 | 23.5 | ||||||
Special items | 42.7 | — | ||||||
Return | 712.0 | 964.7 | ||||||
(b) Average invested capital | ||||||||
Short-term debt | 200.9 | 387.4 | ||||||
Long-term debt | 904.4 | 606.3 | ||||||
Shareowners’ equity | 1,734.2 | 1,911.5 | ||||||
Accumulated amortization of goodwill and intangibles | 634.3 | 599.1 | ||||||
Cash and cash equivalents | (644.5 | ) | (833.2 | ) | ||||
Average invested capital | 2,829.3 | 2,671.1 | ||||||
(c) Effective tax rate | ||||||||
Income tax provision | 150.7 | 246.3 | ||||||
Income from continuing operations before income taxes | $ | 585.1 | $ | 877.0 | ||||
Effective tax rate | 25.8 | % | 28.1 | % | ||||
(a) / (b) * (1-c) Return On Invested Capital | 18.7 | % | 26.0 | % | ||||
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