Praxair reports record EPS of 62 cents
DANBURY, Conn.--(BUSINESS WIRE)--April 22, 1997-- Praxair Inc today reported first-quarter 1997 net
income of $102 million or 62 cents per share, compared to net income of $70 million or 47 cents per share in
the first quarter of 1996. The 1996 results exclude an after-tax charge of $53 million to cover CBI integration
costs. Sales increased to $1,158 million, up 6 percent over the 1996 quarter.
Commenting on the results, H. William Lichtenberger, chairman and chief executive officer, said, "This is the
first quarter that net income has exceeded $100 million since Praxair became a public company in 1992.
Business was particularly strong in the U.S., with sales up a substantial 13 percent, reflecting the start-up of
on-site projects, a strong electronics market, and record sales for packaged gases and surface technologies.
Worldwide, Praxair people continued to steadily improve our overall operating profit margin, which reached
17.9 percent in the first quarter."
Through efficient global tax planning, Praxair was able to reduce its effective tax rate to 25 percent from the
1996 annual rate of 26 percent. The company believes that it can maintain this rate at least through 1998.
Currency translation effects reduced first-quarter 1997 sales by $23 million, about 2 percent, and net income
by $5 million, or 3 cents per share.
Praxair's debt-to-capital ratio was reduced to 54.7 percent on a pro-forma basis, including the proceeds from
the public offering of Chicago Bridge & Iron Company N.V. which was completed shortly after the end of the
quarter. Debt-to-capital was 56.7 percent at year-end 1996. In addition, approximately 800,000 shares were
repurchased during the first quarter to offset dilution from employee incentive programs.
"We are optimistic about prospects for continued growth during 1997," said Lichtenberger. "Demand for
industrial gases continues to increase worldwide, and our innovative applications and supply-systems
technologies are finding new customers around the world. We expect the South American markets to exhibit
good growth in the coming quarters as economic expansion continues, especially in Brazil. There is more
expansion ahead for our worldwide surface technologies and North American packaged gases businesses,
and we expect to benefit from a full year of acquisition synergies."
Praxair is the largest industrial gases company in North and South America, and one of the largest worldwide,
with 1996 sales of $4.4 billion. The company produces, sells, and distributes atmospheric, process and
specialty gases, and high-performance surface coatings. Praxair also is the world's largest supplier of carbon
dioxide and a recognized leader in the commercialization of new technologies that bring productivity and
environmental benefits to a diverse group of industries.
Note: The forward-looking statements contained in this announcement concerning future earnings, projected
operating cost synergies, effective tax rates and worldwide demand for industrial gases involve risks and
uncertainties, and are subject to change based on various factors, including the impact of changes in
worldwide and national economies, achievement of synergies and cost reductions in the integration of the
recently acquired Liquid Carbonic business of CBI Industries, Inc., pricing fluctuations in foreign currencies,
changes in interest rates, the continued timely development and acceptance of new products and processes,
the impact of competitive products and pricing, the ability to achieve tax synergies that will reduce the effective
tax rate, and the impact of tax and other legislation and regulation in the jurisdictions in which the company
operates.
Attachments: Income Statement, Balance Sheet, Statement of Cash Flows, Segment Data
PRAXAIR, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(Millions of dollars, except per share data)
(UNAUDITED)
Quarter ended March 31,
1997 (a) 1996
SALES $1,158 $1,090
Cost of sales, exclusive of
depreciation and amortization 665 629
Selling, general and administrative (b) 167 180
Depreciation and amortization 110 101
Research and development 19 17
CBI integration charges (c) - 85
Other income - net 10 4
OPERATING PROFIT 207 82
OPERATING PROFIT (Excluding the 1996 CBI
integration charges)(c) 207 167
Interest expense 51 50
INCOME BEFORE INCOME TAXES 156 32
Income taxes (d) 39 2
INCOME OF CONSOLIDATED ENTITIES 117 30
Minority interests (17) (15)
Income from equity investments 2 2
NET INCOME $ 102 $ 17
NET INCOME (Excluding the 1996 CBI
integration charges)(c) $ 102 $ 70
PER SHARE: (c,e)
Net Income $ 0.62 $ 0.11
Net income (Excluding the 1996 CBI
integration charges) $ 0.62 $ 0.47
Cash dividends $ 0.11 $0.095
(a) Results for the quarter ended March 31, 1997 include a
$23 million decrease in Sales, a $6 million decrease in
Operating profit, and a $5 million decrease in Net income
from currency translation effects worldwide as compared to
the 1996 results.
(b) The 1997 quarter includes $4 million in Selling, general
and administrative costs associated with acquisitions.
(c) The 1996 CBI integration charges are related to the
integration of CBI's Liquid Carbonic business into Praxair;
primarily severance and lease termination costs.
(d) The 1996 income taxes were $32 million (27.4% effective tax
rate), excluding the effect of the 1996 CBI integration
charges.
(e) Based on 164,332,329 and 148,438,340 shares for the quarters
ended March 31, 1997 and 1996, respectively. In the first
quarter 1997, the FASB issued SFAS No. 128 which establishes
new standards for computing and presenting earnings per share
(EPS), effective December 31, 1997. At December 31, 1997,
all prior periods will be restated to reflect the new Basic
and Diluted Earnings per Share amounts. Praxair's Basic EPS
is essentially Net income divided by the weighted average
shares outstanding and the Diluted EPS is the same as the
currently reported EPS amounts. Pro forma EPS using the
FASB's new standard are as follows:
1997 1996
Basic EPS $ 0.65 $ 0.12 ($ 0.49 Excluding the CBI
integration charges)
Diluted EPS $ 0.62 $ 0.11 ($ 0.47 Excluding the CBI
integration charges)
PRAXAIR, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(Millions of dollars)
March 31,
1997 December 31,
(Unaudited) 1996
ASSETS
Cash and cash equivalents $ 70 $ 63
Accounts receivable 912 914
Inventories 301 312
Assets held for sale - net (a) 277 287
Prepaid and other 129 90
TOTAL CURRENT ASSETS 1,689 1,666
Property, plant and equipment - net 4,317 4,269
Other assets 1,632 1,603
TOTAL ASSETS $7,638 $7,538
LIABILITIES AND EQUITY
Accounts payable $ 335 $ 408
Short-term debt 1,622 1,520
Current portion of long-term debt 68 42
Other current liabilities 508 580
TOTAL CURRENT LIABILITIES 2,533 2,550
Long-term debt 1,685 1,703
Other long-term obligations 802 793
TOTAL LIABILITIES 5,020 5,046
Minority interests and other 583 493
Preferred stock 75 75
Shareholders' equity 1,960 1,924
TOTAL LIABILITIES AND EQUITY $7,638 $7,538
(a) In connection with the 1996 acquisition of CBI, certain
Assets and Liabilities related to businesses to be sold are
reflected at their estimated net realizable value, adjusted
for anticipated earnings, interest and other carrying costs
until sale. The following provides summary data for activity
during the quarter ended March 31, 1997 related to these
businesses:
Assets held for sale - net, at December 31, 1996 $ 287
Less: Net income of operations held for sale (4)
After tax proceeds from sale of businesses (10)
Add: Interest expense, net of taxes 4
Assets held for sale - net, March 31, 1997 $ 277
On April 2, 1997, approximately 96% of Chicago Bridge & Iron
Company N.V. (CBIC) was sold in an initial public offering on the
New York Stock Exchange and certain outstanding receivables from CBIC
were paid. This transaction reduced Assets held for sale - net by
approximately $215 million, after taxes.
PRAXAIR, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Millions of dollars)
(UNAUDITED)
Quarter ended March 31,
1997 1996
Net Cash provided by (used for):
Operating Activities (a) $ 60 $ 106
Investing activities (b) (209) (1,723)
Financing activities (c) 157 1,650
8 33
Effect of exchange rate changes on
Cash and cash equivalents (1) -
Change in cash and cash equivalents 7 33
Cash and cash equivalents beginning of year 63 15
Cash and cash equivalents end-of-period $ 70 $ 48
(a) The first quarter of 1997 operating cash flow was negatively
impacted by cash payments of $55 million related to prior
years' incentive compensation programs.
Quarter ended March 31,
1997 1996
(b) Investing activities include
the following:
Capital expenditures $ (200) $ (223)
Investments (22) (1,505)
Divestitures and asset sales 13 5
$ (209) $(1,723)
(c) Financing activities include
the following:
Debt increases (reductions) - net $ 118 $ 1,213
Issuances of common stock 40 512
Purchases of common stock (39) (7)
Cash dividends (18) (13)
Minority transactions and Other 56 (55)
$ 157 $ 1,650
PRAXAIR, INC. AND SUBSIDIARIES
GEOGRAPHIC SEGMENT DATA
(Millions of dollars)
UNAUDITED
Quarter ended March 31,
1997 1996
SALES
United States (a) $ 588 $ 522
South America (b) 248 243
Europe (b) 150 155
Canada, Mexico, Asia and Other (b) 172 170
$1,158 $1,090
OPERATING PROFIT
excluding the 1996 CBI integration
charges (c)
United States $ 112 $ 79
South America (b) 52 48
Europe (b) 29 29
Canada, Mexico, Asia and Other (b) 20 19
Corporate (6) (8)
$ 207 $ 167
(a) The 1997 Sales in the United States includes $10 million
associated with acquisitions, net of divestitures.
(b) The Sales and Operating profit for the quarter ended March
31, 1997 versus the quarter ended March 31, 1996 includes the
following currency translation effects:
Sales Operating Profit
Increases/(Decreases)
South America $ (9) $ (2)
Europe (11) (4)
Canada, Mexico, Asia, and Other (3) -
$ (23) $ (6)
(c) The 1996 Operating profit effect, by geographic segment,
associated with the $85 million CBI integration charge for
the 1996 quarter is as follows:
1996
OPERATING PROFIT
United States $ 37
South America 13
Europe 4
Canada, Mexico, Asia and Other 28
Corporate 3
$ 85
CONTACT: Susan Szita Gore (203) 837-2311 |
