American Standard Companies Inc. (NYSE: ASD) today announced that third quarter 1999 diluted per share earnings increased 13% to $0.98 from $0.87 in 1998 (before restructuring expenses). Revenues for the quarter ended September 30 were $1.9 billion, an increase of 10% over the same period in 1998, up 12% excluding unfavorable foreign exchange effects. Mr. Emmanuel Kampouris, Chairman and Chief Executive Officer, remarked: "We are very pleased to report a record-setting third quarter. In our largest business, Air Conditioning, revenue was up 12% in the third quarter. Plumbing had strong revenue growth of 14% while Automotive was down 4% entirely due to exchange. The Company's overall solid revenue growth of 10% in the quarter and 10% year-to-date reflects the strength of our geographic and product diversity. "The Company's earnings growth and operating margin expansion, to 10.5% from 9.7% in the quarter, reflects our continued emphasis on leveraging sales growth and reducing costs. Operating earnings and margins in our Plumbing and Air Conditioning businesses were particularly strong in the quarter and year-to- date. Automotive's year-to-date operating income and margin, although somewhat lower than last year, still represent exceptional performance in its industry." Mr. Kampouris stated that he expects sales for the fourth quarter and the full year to be up about 10% and diluted earnings per share to be up 18% to 19% in each period as well.
Third Quarter 1999 Business Highlights * The Company decided to pursue the sale of its Medical Systems Group. * Home Depot selected American Standard as its Plumbing Products Partner of the Year for outstanding service and support. * Volvo selected WABCO as its global pneumatic systems supplier. * Sears selected Trane as its supplier of premium brand residential central heating and air conditioning products. Sales Total Sales for the third quarter of 1999 were $1.9 billion, up 10% from last year (12% excluding a $30 million unfavorable foreign exchange effect). Excluding foreign exchange effects: Air Conditioning Products sales increased 12% to $1,179 million. US markets expanded 5% to 6% as replacement and renovation continued to grow and new housing and commercial construction remained near record high levels. Markets outside the US were mixed with Europe up slightly while markets in Asia and Latin America were down. Worldwide Applied Systems sales advanced 12% due to increases in the US commercial equipment business, strong performance in the sales and service operations and a 3% increase in the International Applied business, where gains in Europe offset declines in Latin America and Asia. Worldwide Unitary Systems sales also rose 12% primarily from strength in both US residential and commercial operations. International unitary sales declined slightly, primarily in Latin America. Plumbing Products sales increased 18% to $443 million, including $74 million from the recently acquired Armitage/Dolomite businesses and a reduction of $17 million of sales related to the divestiture of Porcher distribution in the fourth quarter of 1998. Markets in the US expanded by over 5% as renovation and remodeling, driven by the large retail home center expansion, continued to grow and new housing starts remained at high levels. Markets were flat in Europe, continued to be soft in Asia and were down significantly in Latin America. Sales in Europe, excluding the acquisition and divestiture, were essentially flat with the prior year and sales in Asia were down. Sales in the Americas increased 5% due to continued strong growth of 14% in the US retail and wholesale channels, partly offset by declines in Latin America. Automotive Products sales increased 2% to $255 million. European and Brazilian truck production were down 5% and 38%, respectively, in the quarter, while US truck production increased 20%. The Company's improvement was driven by higher export sales and sales by the US compressor manufacturing joint venture. As expected, sales to commercial vehicle manufacturers in Europe and Brazil were down compared to the prior year. Non-consolidated sales of anti-lock braking systems by the Company's US joint venture rose 22%, resulting in increased equity income. Medical Systems sales were $22 million in the quarter, flat to the prior year, reflecting increased sales of new diagnostic products offset by the expected decline of older radioimmunoassay products. Segment Income Total Segment Income in the third quarter of 1999 was $200 million, an increase of 19% from $168 million last year (22% excluding a $4 million unfavorable foreign exchange effect). Excluding foreign exchange effects: Air Conditioning Products segment income increased $27 million, or 24%, to $141 million. Worldwide Applied Systems benefited from improved volume in the US, plus cost improvements in international markets, primarily Europe. Worldwide Unitary Systems posted strong growth in the US as both volume and margin improved over an excellent prior year performance and also benefited from cost improvements overseas. Plumbing Products segment income increased $17 million, or 68%, to $42 million, mainly due to the acquired Armitage/Dolomite busineses, strong volume increases in the US and margin improvement from the European restructuring program. Latin America remained flat despite a volume decrease. The successful restructuring of both the Americas and European Plumbing businesses has substantially lowered their cost structures, resulting in improving trends in margins and income. Automotive Products segment income decreased $4 million to $27 million mainly due to a one-time shared cost associated with a design change, increased product development spending in Europe and a product mix reflecting increased export sales, partly offset by increased income from the US compressor manufacturing joint venture. Medical Systems segment loss of $10 million was $4 million higher than the third quarter of 1998 entirely due to a one-time charge associated with the discontinuance of in-house manufacturing of breath test instruments and kits in favor of lower cost vendor sourcing. Development costs of new diagnostic products and accelerated virus research continued at a high level. Equity in Net Income of Unconsolidated Joint Ventures was unchanged at $9 million. Income from Automotive Products' US braking systems joint venture increased in the quarter but was offset by small declines elsewhere. Interest Expense of $47 million was $4 million higher than in the prior year period, due to the effect of increased debt arising principally from the Armitage/Dolomite acquisition, partly offset by the lower average interest rates achieved through the 1998 and 1999 debt refinancings. Corporate and Other Expense of $39 million was $11 million higher than the prior year mainly due to a one-time charge related to pension benefits and increased financing fees paid to the Company's financial services joint venture related to increased volumes in the US businesses. Income Taxes reflect a continuing effective rate of 41.5% compared to 39.0% (excluding the effect of restructuring charges) for the 1998 quarter when the annual rate was adjusted. Net Income, before restructuring expenses in 1998, increased 11% to $72 million and Diluted Per Share Earnings increased 13% to $0.98 for the quarter. Foreign Exchange had a negative effect on sales of $30 million, on segment income of $4 million and on diluted per share earnings of $0.02. Latin America weakness in the quarter had a negative impact on diluted EPS of $0.02. Comments in this earnings release contain certain forward- looking statements which are based on management's good faith expectations and belief concerning future developments. Actual results may differ materially from these expectations as a result of many factors, relevant examples of which are set forth in the Company's 1998 Annual Report on Form 10-K and in the "Management's Discussion and Analysis" section of the Company's Annual and Quarterly Reports to Shareholders. American Standard is a $7 billion global, diversified manufacturer of Trane(R) and American Standard(R) air conditioning products, American Standard(R), Ideal Standard(R), Standard(R), Porcher(R), Armitage Shanks(R) and Dolomite(R) plumbing products, WABCO(R) commercial and utility vehicle braking and control systems, Copalis(R) and Pylori-Chek (TM) medical diagnostic systems and DiaSorin(TM) medical diagnostic products. The company operates 116 manufacturing facilities in 33 countries and employs approximately 57,000 people worldwide. For Further Information Contact: Ray Pipes, 732-980-6095 or Phil Bradtmiller, 732-980-6038 The latest news release and corporate information can be heard on 888-ASD-NEWS. Additional information on American Standard is available on the Company's Worldwide Web site at http://www.americanstandard.com ots Original Text Service: American Standard Companies Inc. Internet: http://www.newsaktuell.de Contact: Ray Pipes, 732-980-6095, or Phil Bradtmiller, 732-980-6038, both of American Standard Companies Inc.