8-KOther Events

DEERE & CO 8-K Report (Nov 20, 2002)

Filed November 20, 2002For Securities:DE

Summary

Deere & Company (DE) reported a significant turnaround in its fourth quarter and full fiscal year 2002 results, moving from net losses in the prior year to profitability. This improvement was driven by broad-based gains across all business segments, including Agricultural Equipment, Commercial & Consumer Equipment, and Construction & Forestry. The company highlighted increased net sales and revenues, coupled with successful cost-reduction initiatives and efficient asset management, which contributed to a substantial increase in cash flow from operations. For the full fiscal year 2002, Deere & Company reported a net income of $319.2 million, a substantial improvement from a net loss of $64.0 million in fiscal year 2001. Excluding restructuring costs, the company's adjusted net income more than doubled. The company anticipates further improvement in fiscal year 2003, projecting increased equipment sales and a significant rise in overall net income, reflecting confidence in its ongoing strategic initiatives.

Key Highlights

  • 1Deere & Company reported a net income of $68 million ($0.28 per share) for the fourth quarter of fiscal 2002, a significant improvement from a net loss of $320.1 million in the prior year's quarter.
  • 2Full-year fiscal 2002 net income reached $319.2 million ($1.33 per share), a strong recovery from a net loss of $64.0 million in fiscal 2001.
  • 3All business segments, including Agricultural, Commercial & Consumer, and Construction & Forestry equipment, showed financial performance improvements.
  • 4Total net sales and revenues for the fourth quarter increased by 10% to $3.469 billion, and for the full year by 5% to $13.947 billion.
  • 5The company generated $1.9 billion in cash from operations for the full year, supported by cost-reduction initiatives and a $323 million reduction in trade receivables and inventories.
  • 6Deere & Company forecasts continued improvement for fiscal year 2003, with net equipment sales expected to increase by 8-10% and enterprise net income projected to be between $500 million and $600 million.
  • 7The financial services segment also demonstrated improved performance, with net income increasing for both the fourth quarter and the full year.

Frequently Asked Questions

The primary driver was broad-based improvements across all of Deere & Company's business segments. This included higher net sales and revenues, coupled with successful cost-reduction initiatives and efficient asset management, which collectively led to a significant increase in profitability and cash flow from operations.

Deere & Company experienced a substantial turnaround, moving from a net loss of $64.0 million in fiscal year 2001 to a net income of $319.2 million in fiscal year 2002. The fourth quarter also showed a dramatic improvement, with net income of $68.0 million compared to a net loss of $320.1 million in the prior year's fourth quarter.

Deere & Company expects continued improvement in fiscal year 2003. They forecast net equipment sales to increase by 8-10% and enterprise net income to be in the range of $500 million to $600 million. This outlook is supported by expectations of growth in agricultural equipment sales, particularly overseas, and continued strength in commercial and consumer equipment.

The company implemented several initiatives, including cost-reduction measures, expense control (administrative and R&D), efficient asset management leading to reduced trade receivables and inventories, and restructuring actions such as factory closures. These efforts helped improve production levels and operational efficiencies.