1
EXHIBIT 99.1
[BFGOODRICH Logo] NEWS
PR00-0008
THE BFGOODRICH COMPANY Media Contact: Kevin Ramundo
3 Coliseum Centre Phone: 704-423-7024
2550 West Tyvola Rd. Fax: 704-423-7127
Charlotte, North Carolina 28217
www.bfgoodrich.com Investor Contact: Paul Gifford
Phone: 704-423-5517
Fax: 704-423-5516
BFGOODRICH REPORTS FOURTH QUARTER RESULTS AND RECORD PERFORMANCE FOR 1999
- - 1999 CONTINUES FIVE CONSECUTIVE YEARS OF SALES AND EARNINGS GROWTH*
- - FULL-YEAR FREE CASH FLOW INCREASED TO $242 MILLION*
*Excludes special items
CHARLOTTE, N.C., February 3, 2000 - The BFGoodrich Company (NYSE: GR) announced
today that net income in the fourth quarter, excluding special items, was $87.0
million, or $.78 per share, compared to $94.4 million, or $.85 per share, in the
year-ago quarter. For the full year, net income rose to $361.7 million, or $3.24
per share, excluding special items, compared to $327.6 million, or $2.91 per
share, in 1998 -- an 11% increase on a per-share basis. Sales for the quarter
and the full year were $1.3 billion and $5.5 billion, respectively. The results
include Coltec Industries and have been restated to conform accounting practices
following the Coltec merger this past July.
On an after-tax basis, the company incurred net special charges of $20.7 million
in the fourth quarter and $192.1 million for the entire year, largely related to
costs associated with the Coltec merger and consolidation activities. Including
these charges, net income equaled $66.3 million, or $.60 per share, in the
fourth quarter, and $169.6 million, or $1.53 per share, for the entire year.
Commenting on the company's performance, David L. Burner, BFGoodrich's chairman
and chief executive officer, said, "1999 was one of the most successful years in
our company's history. We completed our largest merger ever and achieved record
earnings for the fifth consecutive year, excluding special charges. Segment
operating income, excluding special items, exceeded $800 million for the first
time, and operating margins increased to 14.9%, a level which ranks among the
highest achieved by our peer companies. Cash flow was very strong in the fourth
quarter, contributing to free cash flow of $242 million, prior to special items,
for all of 1999."
Page 1 of 3
PR00-0008 - BFGoodrich reports fourth quarter results and record performance
for 1999
2
[BFGOODRICH Logo] NEWS
FOURTH QUARTER SEGMENT REVIEW
In the Aerospace segment, operating income decreased 6% to $140.4 million and
sales declined 5% percent to $870.1 million compared to the year-ago quarter,
which was the most profitable in the segment's history. The current quarter's
results reflect lower original equipment deliveries in aerostructures and
landing systems, partially offset by higher after-market demand for wheels and
brakes and productivity savings.
In the Performance Materials segment, operating income increased 10% to $34.8
million and sales increased slightly to $300.4 million. The increase in
operating income reflects improved results in consumer specialties and continued
productivity savings, partially offset by lower prices in the rest of the
segment.
In the Engineered Industrial Products segment, sales decreased 11% to $159.7
million, and operating income was $18.9 million, versus $34.8 million in the
year-ago quarter. Market softness in industries served by the engine, compressor
and sealing technology businesses was the major factor behind the lower results.
FULL YEAR REVIEW
In 1999, the Aerospace segment had operating income of $558.7 million, an
increase of 12 percent from $500.0 million in 1998 on a 4% increase in sales to
$3.6 billion. Strong demand for commercial and other aircraft, wheels and brakes
in the aftermarket, and maintenance, repair and overhaul services were the major
factors in the segment's results.
The Performance Materials segment had operating income of $150.4 million, an
increase of 3 percent from $145.8 million in 1998 as sales increased to over
$1.2 billion. The increase in operating income reflects improved results in
consumer specialties and polymer additives and specialty plastics, and continued
productivity savings, partially offset by lower selling prices in the rest of
the segment. Lower average raw material costs were also a factor.
The Engineered Industrial Products segment had operating income of $118.2
million, a decrease of 10 percent from $131.6 million in 1998. Sales were $702
million in 1999, a 10 percent decrease from $780 million in 1998. Market
softness in industries served by the engine, compressor and sealing technology
businesses was the major factor behind the lower results.
Page 2 of 3
PR00-0008 - BFGoodrich reports fourth quarter results and record performance
for 1999
3
[BFGOODRICH Logo] NEWS
OUTLOOK
The company expects that it will face challenging market conditions in 2000. In
aerospace, 1999 was the peak in the current cycle and the strongest year in the
history of the commercial aircraft industry. With the decline in commercial
aircraft deliveries in 2000, the company will look to its increasingly strong
presence in the after-market and in regional and business aircraft markets for
growth. The Performance Materials segment will face higher raw material costs,
while softness is likely to continue in the markets served by the company's
industrial products. In light of these conditions, BFGoodrich continues to
anticipate that its financial performance in 2000 will be relatively flat
compared to 1999.
In commenting on the company's outlook, Dave Burner said, "While 2000 will be a
challenging year, we remain confident in the strength of our businesses and will
strive to build on our track record of strong financial performance. Our
increased emphasis on programs for top-line growth, and productivity and cost
reduction initiatives such as lean manufacturing, will bring us solidly through
2000 and position us for additional growth in 2001. BFGoodrich remains fully
committed to increasing shareholder value and delivering consistent sales and
profit growth as it has in recent years."
The BFGoodrich Company, headquartered in Charlotte, North Carolina, has leading
market positions in advanced aerospace systems, performance materials, and
engineered industrial products. The company has $5.5 billion in annual revenues
and 27,000 employees worldwide.
The tables that follow provide more detailed information about BFGoodrich
results for the fourth quarter and full year 1999 and 1998.
[Part of this announcement contains forward-looking statements that involve
risks and uncertainties, and actual results could differ materially from those
projected in the forward-looking statements. The risks and uncertainties are
detailed from time to time in reports filed with the Securities and Exchange
Commission, including but not limited to the last section of the Management's
Discussion and Analysis entitled "Forward-Looking Information is Subject to Risk
and Uncertainty" contained in the company's Annual Report on Form 10-K, the
Current Report on Form 8-K filed on December 17, 1999 and in other filings.]
###
Page 3 of 3
PR00-0008 - BFGoodrich reports fourth quarter results and record performance
for 1999
4
THE BFGOODRICH COMPANY
(Dollars in millions except per share amounts)
Three Months Ended
December 31
---------------------------------------------------------------
1999 1999 1998 1998
As Reported As Adjusted(A) As Reported As Adjusted(B)
Sales $ 1,330.2 $ 1,330.2 $ 1,390.3 $ 1,390.3
========= ========= ========= =========
Income before Income Taxes
and Trust Distributions 111.7 142.0 143.0 153.5
Income Tax Expense (40.8) (50.4) (50.5) (54.5)
Distributions on Trust Preferred
Securities (4.6) (4.6) (4.6) (4.6)
--------- --------- --------- ---------
Net Income $ 66.3 $ 87.0 $ 87.9 $ 94.4
========= ========= ========= =========
Income Per Share:
Basic $ 0.60 $ 0.79 $ 0.80 $ 0.86
========= ========= ========= =========
Diluted $ 0.60 $ 0.78 $ 0.79 $ 0.85
========= ========= ========= =========
Weighted - Average Number
of Shares Outstanding
(in millions):
Basic 110.2 110.2 109.9 109.9
========= ========= ========= =========
Diluted 113.3 113.3 113.5 113.5
========= ========= ========= =========
(A) Results exclude the effect of a $30.3 million charge ($20.7 million
after-tax), or $0.18 a diluted share, primarily related to merger-related
and consolidation costs.
(B) Results exclude the effect of a $10.5 million charge ($6.5 million
after-tax), or $0.06 a diluted share, related to a restructuring charge and
a write-down of an impaired asset in the Aerospace Segment.
5
THE BFGOODRICH COMPANY
(Dollars in millions except per share amounts)
Year Ended
December 31
---------------------------------------------------------------
1999 1999 1998 1998
As Reported As Adjusted(A) As Reported As Adjusted(B)
Sales $ 5,537.5 $ 5,537.5 $ 5,454.8 $ 5,454.8
========= ========= ========= =========
Income from Continuing Operations before
Income Taxes and Trust Distributions 334.5 597.3 594.2 546.4
Income Tax Expense (146.5) (217.2) (218.5) (202.7)
Distributions on Trust Preferred Securities (18.4) (18.4) (16.1) (16.1)
--------- --------- --------- ---------
Income from Continuing Operations 169.6 361.7 359.6 327.6
Income (Loss) from Discontinued
Operations -- -- (1.6) --
Extraordinary Item -- -- (4.3) --
--------- --------- --------- ---------
Net Income $ 169.6 $ 361.7 $ 353.7 $ 327.6
========= ========= ========= =========
Income (Loss) Per Share:
Diluted
Continuing Operations $ 1.53 $ 3.24 $ 3.19 $ 2.91
Discontinued Operations -- -- (0.01) --
Extraordinary Item -- -- (0.04) --
--------- --------- --------- ---------
Net Income $ 1.53 $ 3.24 $ 3.14 $ 2.91
========= ========= ========= =========
Free Cash Flow
Operating Cash Flow $ 579.7 $ 504.9
Dividends (91.6) (75.7)
Capital Expenditures (246.3) (262.0)
--------- ---------
Free Cash Flow $ 241.8 $ 167.2
========= =========
(A) Results exclude the effect of a $262.8 million charge ($192.1 million
after-tax), or $1.69 a diluted share, primarily related to merger-related
and consolidation costs. Weighted average diluted shares as adjusted
include 2.9 million potential shares for assumed conversions of
convertible preferred securities that were anti-dilutive on an as reported
basis. Operating cash flow as adjusted excludes $207.1 million of pre-tax
cash expenditures for special items.
(B) Results exclude the effect of a $58.3 million gain ($38.5 million
after-tax), or $0.34 a diluted share, related to the sale of the Holley
Performance Products subsidiary and a $10.5 million charge ($6.5 million
after-tax), or $0.06 a diluted share, related to a restructuring charge
and a write-down of an impaired asset in the Aerospace Segment. Results
also exclude the after-tax effects of discontinued operations ($1.6
million loss, or $0.01 a diluted share) and an extraordinary item ($4.3
million loss, or $0.04 a diluted share). Operating cash flow as adjusted
excludes $5.8 million of pre-tax cash expenditures for special items.
6
BFGOODRICH SEGMENT REPORTING
(Dollars in millions)
Three Months Ended Year Ended
December 31 December 31
------------------------- -------------------------
1999 1998 1999 1998
Sales:
Aerospace:
Aerostructures $ 257.2 $ 282.9 $1,139.1 $1,144.2
Landing Systems 250.5 267.3 1,032.9 963.2
Sensors & Integrated Systems 241.8 234.8 938.4 911.3
Maintenance, Repair & Overhaul 120.6 128.5 507.0 460.6
-------- -------- -------- --------
870.1 913.5 3,617.4 3,479.3
-------- -------- -------- --------
Engineered Industrial Products 159.7 179.3 702.4 779.9
-------- -------- -------- --------
Performance Materials:
Textile and Coatings Solutions 152.0 147.2 619.7 606.2
Polymer Additives and Specialty Plastics 103.5 108.6 422.2 431.3
Consumer Specialties 44.9 41.7 175.8 158.1
-------- -------- -------- --------
300.4 297.5 1,217.7 1,195.6
-------- -------- -------- --------
Total Sales $1,330.2 $1,390.3 $5,537.5 $5,454.8
======== ======== ======== ========
Operating Income:
Aerospace:
Aerostructures $ 55.0 $ 61.8 $ 191.5 $ 189.1
Landing Systems 36.3 37.2 157.7 117.9
Sensors & Integrated Systems 44.0 47.1 174.4 170.3
Maintenance, Repair & Overhaul 5.1 2.9 35.1 22.7
-------- -------- -------- --------
140.4 149.0 558.7 500.0
-------- -------- -------- --------
Engineered Industrial Products 18.9 34.8 118.2 131.6
-------- -------- -------- --------
Performance Materials:
Textile and Coatings Solutions 9.6 10.4 44.4 63.0
Polymer Additives and Specialty Plastics 16.5 17.3 73.6 58.8
Consumer Specialties 8.7 3.9 32.4 24.0
-------- -------- -------- --------
34.8 31.6 150.4 145.8
-------- -------- -------- --------
Total Segment Operating Income $ 194.1 $ 215.4 $ 827.3 $ 777.4
Corporate General and Administrative Costs (20.6) (21.6) (84.6) (83.7)
Merger-related and Consolidation Costs (28.4) (10.5) (269.4) (10.5)
-------- -------- -------- --------
Total Operating Income $ 145.1 $ 183.3 $ 473.3 $ 683.2
======== ======== ======== ========
7
THE BFGOODRICH COMPANY
CONSOLIDATED STATEMENT OF INCOME
(Dollars in millions, except per share amounts)
Year Ended
December 31,
---------------------------------------------
1999 1998 1997
--------- --------- ---------
Sales $ 5,537.5 $ 5,454.8 $ 4,687.9
Operating Costs and Expenses:
Cost of sales 3,953.3 3,919.2 3,372.7
Charge for MD-90 contract -- -- 35.2
Selling and administrative expenses 841.5 841.9 772.1
Merger-related and consolidation costs 269.4 10.5 77.0
--------- --------- ---------
5,064.2 4,771.6 4,257.0
--------- --------- ---------
Operating income 473.3 683.2 430.9
Interest expense (138.3) (134.1) (127.9)
Interest income 4.8 6.1 12.0
Gain on issuance of subsidiary stock -- -- 13.7
Other income (expense) - net (5.3) 39.0 15.0
--------- --------- ---------
Income from continuing operations before
income taxes and Trust distributions 334.5 594.2 343.7
Income tax expense (146.5) (218.5) (138.2)
Distributions on Trust preferred
securities (18.4) (16.1) (10.5)
--------- --------- ---------
Income from continuing operations 169.6 359.6 195.0
Income (loss) from discontinued operations -- (1.6) 84.3
--------- --------- ---------
Income before extraordinary items 169.6 358.0 279.3
Extraordinary losses on debt
extinguishment - net of taxes -- (4.3) (19.3)
--------- --------- ---------
Net Income $ 169.6 $ 353.7 $ 260.0
========= ========= =========
Earnings per share:
Basic
Continuing operations $ 1.54 $ 3.26 $ 1.81
Discontinued operations -- (0.01) 0.78
Extraordinary Item -- (0.04) (0.18)
--------- --------- ---------
Net income $ 1.54 $ 3.21 $ 2.41
========= ========= =========
Diluted
Continuing operations $ 1.53 $ 3.19 $ 1.75
Discontinued operations -- (0.01) 0.75
Extraordinary Item -- (0.04) (0.17)
--------- --------- ---------
Net income $ 1.53 $ 3.14 $ 2.33
========= ========= =========
Net income excluding special items $ 3.24 $ 2.91 $ 2.34
========= ========= =========
Weighted average number of common and common
equivalent shares outstanding-in millions
Basic 110.0 110.2 107.9
Diluted 110.7 113.9 112.1
Diluted excluding special items 113.6 113.9 112.1
8
ADDITIONAL COMMENTS FROM INVESTOR RELATIONS
SUPPLEMENT TO THE PRESS RELEASE
SEGMENT RESULTS
FOURTH QUARTER 1999 VERSUS THIRD QUARTER 1999
AEROSPACE SEGMENT
($ millions)
4Q99 3Q99
---- ----
Revenue $870.1 $855.2
Operating Income 140.4 130.9
In the Aerospace segment, sales increased 2% from the third quarter to the
fourth quarter 1999. Operating income during the same period increased 7%. The
fourth quarter increases are due primarily to increased sales and earnings in
the Aerostructures group due to slightly increased deliveries to commercial
airplane manufacturers, consistent with their delivery schedules, strong
aftermarket demand and a gain on an exchange of land.
PERFORMANCE MATERIALS SEGMENT
($ millions)
4Q99 3Q99
---- ----
Revenue $300.4 $306.3
Operating Income 34.8 39.4
Performance Materials' sales decreased by about 2%, while operating income
decreased by 12%, primarily due to higher raw material costs offset slightly by
continued productivity improvements. The on-going competitive pricing pressures
in the Textile and Coating Solutions group, and Polymer Additives and Specialty
Plastics group also contributed to the decline, partially offset by improved
performance in the Consumer Specialties group.
ENGINEERED INDUSTRIAL PRODUCTS SEGMENT
($ millions)
4Q99 3Q99
---- ----
Revenue $159.7 $170.6
Operating Income 18.9 28.1
In Engineered Industrial Products, sales decreased 6% for the quarter due to
overall softness in the market, particularly in the sealing market, and in the
demand for FM engines. Operating income decreased 33% primarily as a result of
the decreases in sales, coupled with increased R&D spending for development of
the US Navy's LPD projects. Deliveries for the LPD projects will begin in 2000.
Page 1
9
GROUP RESULTS
FULL YEAR 1999 VERSUS FULL YEAR 1998
BFGOODRICH AEROSPACE SEGMENT
AEROSTRUCTURES GROUP
($ millions)
FULL YEAR FULL YEAR
4Q99 4Q98 1999 1998
---- ---- ---- ----
Revenue $257.2 $282.9 $1,139.1 $1,144.2
Operating Income 55.0 61.8 191.5 189.1
Operating income for the year increased $2.4 million, or 1%, from $189.1 million
during 1998 to $191.5 million in 1999. The increase is primarily attributable to
higher after-market sales that generally carry a higher margin than OEM sales,
the settlement of the PW4000 claim and a gain on an exchange of land. This
increase is partially offset by higher manufacturing costs associated with the
restructuring of several of the group's facilities and the start-up of the
group's Arkadelphia facility. For the fourth quarter, however, deliveries to OEM
were down as a result of planned commercial airplane production decreases.
LANDING SYSTEMS GROUP
($ millions)
FULL YEAR FULL YEAR
4Q99 4Q98 1999 1998
---- ---- ---- ----
Revenue $250.5 $267.3 $1,032.9 $963.2
Operating Income 36.3 37.2 157.7 117.9
Sales during 1999 increased $69.7, or 7%, from $963.2 in 1998 to $1,032.9 in
1999. The increase is attributable to higher after-market demand for wheels and
brakes, improved penetration in aircraft seating and a product line acquisition
completed in late 1998. Demand for commercial transport OE products such as
landing gear and evacuation slides, which are tied more closely to the OE
production cycle, was largely flat year to year, however, deliveries to OEM's
were down in the fourth quarter as a result of planned commercial airplane
production decreases. An overall favorable sales mix, increased volume,
acquisitions and operating efficiency improvements all contributed to the higher
earnings results.
Page 2
10
SENSORS & INTEGRATED SYSTEMS GROUP
($ millions)
FULL YEAR FULL YEAR
4Q99 4Q98 1999 1998
---- ---- ---- ----
Revenue $241.8 $234.8 $938.4 $911.3
Operating Income 44.0 47.1 174.4 170.3
Sales for the year increased 3% to $938.4 in 1999. The increase resulted from
higher unit volume sales of sensor, launch vehicle electronic, cockpit avionic,
aircraft lighting, and gas turbine products, partially offset by lower sales of
fuel control products. Operating income for the year increased 2% to $174.4.
This increase reflects the impact of higher sales volumes and a favorable sales
mix of higher margin after-market spares, partially offset by increased R&D
spending on the development of new products for Health, Usage, and Monitoring
systems (HUMS).
MAINTENANCE, REPAIR & OVERHAUL (MRO) GROUP
($ millions)
FULL YEAR FULL YEAR
4Q99 4Q98 1999 1998
---- ---- ---- ----
Revenue $120.6 $128.5 $507.0 $460.6
Operating Income 5.1 2.9 35.1 22.7
Sales during 1999 increase $46.4, or 10%, from $460.6 in 1998 to $507.0 in 1999.
The increase reflects higher demand for airframe, component and landing gear
overhaul maintenance services in addition to the acquisition of the remaining
interest of a joint venture business in the Asia Pacific region. Operating
income for the year increased 55% to $35.1. The increase is principally due to
the higher demand experienced in all of the MRO markets served by the Company,
as well as the impact of the acquisition noted above and continued operational
improvements.
Page 3
11
BFGOODRICH PERFORMANCE MATERIALS SEGMENT
TEXTILE & COATINGS SOLUTIONS GROUP
($ millions)
FULL YEAR FULL YEAR
4Q99 4Q98 1999 1998
---- ---- ---- ----
Revenue $152.0 $147.2 $619.7 $606.2
Operating Income 9.6 10.4 44.4 63.0
Sales increased by $13.5, or 2%, from $606.2 in 1998 to $619.7 in 1999. The
increase in sales was primarily related to the Freedom acquisition (March 1998)
and includes a full year of results in 1999 vs. only nine months in 1998. The
sales impact of acquisitions exceeded the volume and price declines experienced
by some of the Group's other businesses. Operating income decreased by $18.6, or
30%, from $63.0 in 1998 to $44.4 in 1999. The impact of the acquisition was not
sufficient to offset the unfavorable volume and price declines noted above,
particularly in regards to the textile markets served by the Group.
POLYMER ADDITIVES & SPECIALTY PLASTICS GROUP
($ millions)
FULL YEAR FULL YEAR
4Q99 4Q98 1999 1998
---- ---- ---- ----
Revenue $103.5 $108.6 $422.2 $431.3
Operating Income 16.5 17.3 73.6 58.8
Sales for the year decreased by $9.1, or 2%, from $431.3 in 1998 to $422.2 in
1999. The decrease was caused primarily by price reductions, offset by favorable
volume/mix. The price reductions impacted most of the Group's products, while
the volume increase was driven primarily by the Group's TempRite high-heat
resistant plastics used in plumbing products. Operating income increased $14.8,
or 25%, from $58.8 million in 1998 to $73.6 in 1999. The increase was primarily
driven by higher demand in the Group's TempRite business, lower raw material
costs, and continued productivity improvements, partially offset by decreased
volumes and prices for the Group's other products.
Page 4
12
CONSUMER SPECIALTIES GROUP
($ millions)
FULL YEAR FULL YEAR
4Q99 4Q98 1999 1998
---- ---- ---- ----
Revenue $44.9 $41.7 $175.8 $158.1
Operating Income 8.7 3.9 32.4 24.0
Sales increased $17.7 or 11%, from $158.1 in 1998 to $175.8 in 1999. The
increase in sales was driven by the Freedom acquisition, partially offset by
volume and price declines in some of the remaining businesses. Operating income
increased $8.4, or 35%, from $24.0 in 1998 to $32.4 in 1999. The increase in
operating income was attributable to the Freedom acquisition noted above,
manufacturing efficiencies, continued productivity improvements and a one-time
favorable settlement from a patent infringement lawsuit.
Page 5
13
BFGOODRICH ENGINEERED INDUSTRIAL PRODUCTS SEGMENT
ENGINEERED INDUSTRIAL PRODUCTS
($ millions)
FULL YEAR FULL YEAR
4Q99 4Q98 1999 1998
---- ---- ---- ----
Revenue $159.7 $179.3 $702.4 $779.9
Operating Income 18.9 34.8 118.2 131.6
Sales for the year decreased 10%, from $779.9 in 1998 to $702.4 in 1999. The
decrease in sales is primarily attributable to a 1998 disposition of a business
unit (Holley) and reduced volume in most of the Segment's businesses, partially
offset by favorable prices. The reduced volume is attributable to weakness in
most markets served by the Segment, especially the Fairbanks Morse Engine
defense capital goods market, the sealing technologies businesses serving the
domestic chemical and petroleum process industries, and industrial machinery and
equipment markets. Operating income decreased 10% from $131.6 in 1998 to $118.2
in 1999. Overall the decrease in operating income for the year was due to the
market weakness noted above, and to increased R&D spending for development of
the US Navy LPD projects. Deliveries for the LPD projects will begin in 2000.
Page 6
14
Non-Segment Expenses
($ millions)
FULL YEAR FULL YEAR
4Q99 4Q98 1999 1998
---- ---- ---- ----
Corporate G&A $17.8 $17.2 $ 71.1 $ 68.6
Advanced Technology Group 2.8 4.4 13.5 15.1
Net Interest Expense 34.3 33.1 133.5 128.0
Distribution on Trust
Preferred Securities 4.6 4.6 18.4 16.1
Preliminary Balance Sheet and Cash Flow Data
($ millions)
12/31/1999 12/31/1998
Cash and Cash Equivalents $66.4 $53.5
Total Debt $1,761 $1,725
Debt to Capitalization 53.0% 53.3%
Capital Expenditures $246.3 $262.0
Acquisitions $76.1 $521.5
Depreciation and Amortization $230.6 $210.2
Dividends $91.6 $75.7
Page 7