-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Rd5Tb7+jIyQkGJ5CNRMxtYAwb95kME6RnffL8zD41gQiQwTK1SU+rL6yQivzgGcJ fuB2owDTZwxNVkzLldP0Yg== 0000891092-03-001737.txt : 20030728 0000891092-03-001737.hdr.sgml : 20030728 20030728091102 ACCESSION NUMBER: 0000891092-03-001737 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030728 ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030728 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ITT INDUSTRIES INC CENTRAL INDEX KEY: 0000216228 STANDARD INDUSTRIAL CLASSIFICATION: PUMPS & PUMPING EQUIPMENT [3561] IRS NUMBER: 135158950 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-05672 FILM NUMBER: 03804931 BUSINESS ADDRESS: STREET 1: FOUR W RED OAK LANE CITY: WHITE PLAINS STATE: NY ZIP: 10604 BUSINESS PHONE: 9146412058 MAIL ADDRESS: STREET 1: FOUR W RED OAK LANE CITY: WHITE PLAINS STATE: NY ZIP: 10604 FORMER COMPANY: FORMER CONFORMED NAME: ITT CORP DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: INTERNATIONAL TELEPHONE & TELEGRAPH CORP DATE OF NAME CHANGE: 19840321 8-K 1 e15303_8k.txt FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of report (Date of earliest event reported): July 28, 2003 ITT INDUSTRIES, INC. (Exact name of registrant as specified in its charter) Indiana 1-5627 13-5158950 --------------- -------------- ---------------- (State or other (Commission (IRS Employer jurisdiction of File Number) Identification No.) organization) 4 West Red Oak Lane White Plains, New York 10604 --------------------------------------- -------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (914) 641-2000 (Former name or former address if changed since last report) ITEM 9. Regulation FD Disclosure The following information is furnished pursuant to Item 9 "Regulation FD Disclosure" and Item 12 "Results of Operations and Financial Condition." This information shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") or incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. On July 28, 2003 ITT Industries, Inc. issued a press release announcing its earnings for the second quarter of 2003. This press release is attached and incorporated by reference herein as Exhibit 99.1. Exhibit Index (99.1) Press release dated: July 28, 2003 issued by ITT Industries, Inc. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ITT INDUSTRIES, INC. By: /s/ Vincent A. Maffeo ----------------------------- Vincent A. Maffeo Its: Senior Vice President and General Counsel Date: July 28, 2003 EX-99.1 3 e15303ex99_1.txt PRESS RELEASE Exhibit 99.1 ITT Industries Reports Second Quarter EPS of $1.06 with Revenues Up 9 Percent * Defense, Water/Wastewater growth trends continue * Cash from operations exceeds expectations for the quarter; on track for another strong year * Company raises full-year 2003 earnings per share guidance to $3.77-$3.97 (GAAP) WHITE PLAINS, N.Y., July 28 /PRNewswire-FirstCall/ -- ITT Industries, Inc. (NYSE: ITT) today announced second quarter 2003 net income of $99.9 million and diluted earnings per share of $1.06, up $7 million and $0.07 respectively over the second quarter 2002. Reported EPS contains an $0.08 per share positive impact from a benefits claim settlement and a tax settlement, and ($0.04) per share for restructuring actions taken during the second quarter, for a net $0.04 per share impact. "We're pleased to deliver another quarter of earnings growth, with revenues and cash flow exceeding expectations. Our management team continues to do an excellent job in a demanding environment," said Lou Giuliano, Chairman, President, and Chief Executive Officer of ITT Industries. "Our Defense segment posted a 9 percent gain in revenues and strong margin improvement, continuing a long-term growth trend. Our Fluid Technology and Motion & Flow Control businesses each turned in higher revenues and strong performances, thus helping to more than offset continued weakness in our Electronic Components business." "Our Electronic Components segment continues to face difficult market conditions, impacted this quarter particularly by a falloff in demand for our handset connectors and switches in Asia," Giuliano added. "Newly appointed president Brenda Reichelderfer and her team understand the issues facing Electronic Components. The next two quarters will see the introduction of several major new products and improvements in service offerings. Going forward, we believe Electronic Components presents ITT with a real opportunity to boost earnings growth." Financial Highlights * Second quarter 2003 revenues rose 9 percent to $1.44 billion, due mainly to growth in Defense and Fluid Technology. Organic revenue growth was 5 percent. * Operating income for the quarter was $141.5 million, including the ($5.9) million impact of restructuring charges. * During the quarter, the company recorded a ($0.04) per share charge for restructuring, primarily within the Electronic Components and Motion & Flow Control segments. This was more than offset by an $0.08 per share impact from a benefits claim settlement and a tax settlement. * The company continues to see the benefit from improvements implemented through its Value-Based Six Sigma program, with a significant impact in increased sales and savings over the last two years. * Cash from operations significantly exceeded expectations, with the company's second quarter 2003 cash from operations totaling $182.3 million. The company expects continued strong cash flow through the full year. "Overall, we're facing a very mixed set of business conditions, and this actually plays to the strength of our multi-industry portfolio," Giuliano said. "We know that our continuous efforts to improve our competitive stance put us in an excellent position to take advantage of any broad upturn in the economy. Based on our reported results so far this year, including the effects of one-time items, we are raising our full-year (GAAP) EPS guidance to $3.77 - $3.97 per share." Second Quarter Segment Highlights Fluid Technology * Second quarter 2003 FTC revenues rose 13 percent or $65.9 million to $570.6 million, driven by growth in water/wastewater. Operating income was up 12 percent or $7.7 million to $74.1 million, while operating margin declined 20 basis points, reflecting the impact of acquisition integration. * Activity remains strong in the water/wastewater business, with revenues up 24 percent and orders up 27 percent, including acquisitions. Orders realized in the second quarter include an $800K order for wastewater treatment plant equipment in Italy, a $500K order in Sweden and a $1.1 million service contract in Denmark. * In its water business, ITT is positioned to capture new global growth opportunities. The company has entered the high-growth desalinization market, securing in the second quarter a $4.9 million order for a private water system in the United Arab Emirates and a $1.7 million municipal order in Virginia. Defense Electronics & Services * Revenues for Defense Electronics & Services were $452.4 million in the second quarter, up 9 percent or $36.5 million over the second quarter 2002. Operating income rose 15 percent to $46.7 million, and operating margin increased 50 basis points. * The company's Systems and Advanced Engineering & Sciences units continue to gain new service contracts, notably an equipment maintenance contract in Qatar and a facility service contract in Eastern Europe, and additional work on the Spacelift Range Systems and SENSOR contracts. * Contracts won during the second quarter include a $43 million contract to provide communications support to U.S. Air Force locations in Northern Europe, a $31 million contract to upgrade Global Positioning Satellites (GPS), and $21 million in international SINCGARS radio orders. * The company sees long-term growth opportunities in its defense services businesses as the U.S. military repositions its forces around the world. Motion & Flow Control * Despite a downturn in certain key markets, second quarter MFC revenues increased 4 percent or $11 million to $262.7 million, and operating income rose 5 percent to $37.1 million. Operating margin remained flat, due to charges for restructuring. * ITT's automotive businesses see strength amid a sluggish OEM environment, gaining market share in Europe. The Motion Control businesses saw revenues increase 30 percent over the period last year, and the Auto Tubing business secured new platform wins for '05 and '06 models. * The company's Leisure Marine unit realized a 9 percent revenue increase in the quarter, helped by new products and market share gains in the Marine business, and is well positioned to leverage positive market conditions in the recreation, beverage and industrial markets. Electronic Components * EC revenues rose $5.1 million in the quarter to $153.7 million. Operating income fell $16.7 million to $1.9 million, with a corresponding decline in margin, attributable to unfavorable changes in product mix, ongoing price pressures and the impact of restructuring charges taken during the quarter. * Restructuring actions taken in the first half will have the effect of reducing SG&A expenses, increasing Lean Manufacturing initiatives and outsourcing, and accelerating migration of production to lower-cost regions. * ITT has seen revenues within its high-margin mobile handset business decline 30 percent from the period last year due to price pressures, SARS-related inventory buildup in Asia and late product introductions. * A number of new ITT products are now available or are being qualified with customers that will have an impact later in 2003: - KSM switch, the successor to the KSS miniature switch, for mobile telephones - High speed connectors with fiber optic inserts for military and industrial applications - New keypad design for mobile handsets - New interface control for the transportation market ITT Industries Third Quarter and Full Year 2003 Outlook (in millions, except EPS) 2003 2003 Third Quarter Full Year Revenues +8-10% +7-9% Segment Operating Margin 10.9% - 11.3% 11.0% - 11.5% Diluted EPS $0.92 - $0.98 $3.77 - $3.97 About ITT Industries ITT Industries, Inc. (www.itt.com) supplies advanced technology products and services in key markets including: electronic interconnects and switches; defense communication, opto-electronics, information technology and services; fluid and water management and other specialty products. Headquartered in White Plains, NY, the company generated $4.99 billion in 2002 sales. In addition to the New York Stock Exchange, ITT Industries stock is traded on the Midwest, Pacific, Paris and Frankfurt exchanges. Certain material presented herein consists of forward-looking statements which involve known and unknown risks, uncertainties and other important factors that could cause actual results to differ materially from those expressed in, or implied from, such forward-looking statements. Such factors include general economic conditions, foreign currency exchange rates, competition and other factors all as more thoroughly set forth in Item 1. Business and Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations -- Forward-Looking Statements in the ITT Industries, Inc. Form 10-K Annual Report for the fiscal year ended December 31, 2002, and other of its filings with the Securities and Exchange Commission. ITT INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED INCOME STATEMENTS (In millions, except per share) (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2003 2002 2003 2002 Sales and revenues $1,438.2 $1,320.1 $2,734.6 $2,505.9 Costs of sales and revenues 949.6 866.0 1,796.0 1,636.6 Selling, general and administrative expenses 198.6 179.2 398.9 352.5 Research, development and engineering expenses 142.6 129.8 272.2 256.1 Restructuring and other asset impairments 5.9 -- 16.3 -- Total costs and expenses 1,296.7 1,175.0 2,483.4 2,245.2 Operating income 141.5 145.1 251.2 260.7 Interest expense (income), net 5.8 10.0 (9.3) 21.9 Miscellaneous expense (income) 2.1 (1.6) 2.8 (3.0) Income from continuing operations before income taxes 133.6 136.7 257.7 241.8 Income tax expense 41.5 43.8 78.9 77.4 Income from continuing operations 92.1 92.9 178.8 164.4 Discontinued operations, including tax expense of $0.2 in each period 7.8 -- 7.8 -- Net income $99.9 $92.9 $186.6 $164.4 Earnings Per Share: Income from continuing operations: Basic $1.00 $1.02 $1.94 $1.82 Diluted $0.98 $0.99 $1.90 $1.76 Discontinued operations: Basic $0.08 $ -- $0.08 $ -- Diluted $0.08 $ -- $0.08 $ -- Net income: Basic $1.08 $1.02 $2.02 $1.82 Diluted $1.06 $0.99 $1.98 $1.76 Average Common Shares - Basic 92.0 91.0 92.0 90.3 Average Common Shares - Diluted 94.0 93.9 93.9 93.2 ITT INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In millions) June 30, December 31, 2003 2002 (Unaudited) Assets Current Assets: Cash and cash equivalents $236.0 $202.2 Receivables, net 1,073.3 868.3 Inventories, net 592.9 552.9 Other current assets 106.3 77.1 Total current assets 2,008.5 1,700.5 Plant, property and equipment, net 838.3 841.2 Deferred income taxes 531.1 546.3 Goodwill, net 1,602.5 1,550.5 Other intangible assets, net 74.2 74.4 Other assets 875.7 676.7 Total assets $5,930.3 $5,389.6 Liabilities and Shareholders' Equity Current Liabilities: Accounts payable $542.5 $484.0 Accrued expenses 707.8 725.3 Accrued taxes 277.7 221.3 Notes payable and current maturities of long-term debt 465.0 299.6 Total current liabilities 1,993.0 1,730.2 Pension and postretirement benefits 1,639.7 1,629.0 Long-term debt 509.5 492.2 Other liabilities 404.0 400.9 Total liabilities 4,546.2 4,252.3 Shareholders' equity 1,384.1 1,137.3 Total liabilities and shareholders' equity $5,930.3 $5,389.6 ITT INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) (Unaudited) Six Months Ended June 30, 2003 2002 Operating Activities Net income $186.6 $164.4 Discontinued operations, net (7.8) -- Income from continuing operations 178.8 164.4 Adjustments to income from continuing operations: Depreciation and amortization 93.4 85.1 Restructuring and other asset impairments 16.3 -- Payments for restructuring (10.2) (22.6) Change in receivables (132.4) (115.8) Change in inventories (8.4) 7.3 Change in accounts payable and accrued expenses (3.2) 67.1 Change in accrued and deferred taxes 49.8 42.7 Change in other current and non-current assets (214.6) 2.9 Change in other non-current liabilities (8.9) 2.5 Other, net 6.0 2.7 Net Cash - operating activities (33.4) 236.3 Investing Activities Additions to plant, property and equipment (57.7) (52.1) Acquisitions (42.5) (38.8) Proceeds from sale of assets and businesses 9.5 6.8 Other, net 0.1 1.1 Net Cash - investing activities (90.6) (83.0) Financing Activities Short-term debt, net 181.1 (168.4) Long-term debt repaid (17.0) (1.6) Long-term debt issued 0.3 0.3 Repurchase of common stock (16.8) (13.6) Proceeds from issuance of common stock 19.9 79.4 Dividends paid (28.5) (26.8) Other, net 0.1 (0.2) Net Cash - financing activities 139.1 (130.9) Exchange Rate Effects on Cash and Cash Equivalents 8.9 4.5 Net Cash - Discontinued Operations 9.8 20.3 Net change in cash and cash equivalents 33.8 47.2 Cash and cash equivalents - beginning of year 202.2 121.3 Cash and Cash Equivalents - End of Year $236.0 $168.5 SOURCE ITT Industries, Inc. -0- 07/28/2003 /CONTACT: Tom Glover of ITT Industries, +1-914-641-2160, tom.glover@itt.com/ /Web site: http://www.itt.com/ (ITT) -----END PRIVACY-ENHANCED MESSAGE-----