Summary
Ecolab Inc. reported its second quarter and year-to-date results for the period ending June 30, 2011. For the quarter, net sales increased by 12% to $1.7 billion, driven by growth in the U.S. Cleaning & Sanitizing segment and international markets. However, operating income saw a slight decrease of 3% to $198 million, impacted by significant restructuring charges. Net income attributable to Ecolab declined by 3% to $126 million, and diluted EPS was $0.53. Despite the reported decline in profitability, the company highlighted strong "adjusted" performance, excluding special charges and discrete tax items. Adjusted net income increased by 14% and adjusted diluted EPS rose by 14% to $0.64. The company also announced a major subsequent event: the agreement to merge with Nalco Holding Company in a transaction valued at $8.1 billion, which is expected to close in the fourth quarter, subject to shareholder and regulatory approvals. This merger signals a significant strategic move to enhance its position in water treatment and process improvement.
Financial Highlights
55 data points| Revenue | $1.70B |
| Cost of Revenue | $860.80M |
| Gross Profit | $838.00M |
| SG&A Expenses | $609.60M |
| Operating Income | $198.30M |
| Interest Expense | $14.80M |
| Net Income | $126.20M |
| EPS (Basic) | $0.54 |
| EPS (Diluted) | $0.53 |
| Shares Outstanding (Basic) | 231.60M |
| Shares Outstanding (Diluted) | 236.10M |
Key Highlights
- 1Consolidated net sales grew 12% to $1.7 billion for the second quarter, with strong performance in U.S. Cleaning & Sanitizing and International segments.
- 2Operating income decreased 3% to $198 million, primarily due to $30.1 million in special charges related to restructuring activities.
- 3Net income attributable to Ecolab was $125.9 million, a 3% decrease compared to the prior year, with diluted EPS at $0.53.
- 4Adjusted net income, excluding special charges and discrete tax items, increased 14% and adjusted diluted EPS increased 14% to $0.64, indicating underlying operational strength.
- 5The company initiated a significant restructuring plan in Europe aimed at improving efficiency and profitability, with estimated pre-tax charges of $150 million through 2013.
- 6Ecolab announced a pending merger with Nalco Holding Company, a leading water treatment and process improvement company, with a total transaction value of $8.1 billion, signaling a major strategic expansion.
- 7Cash provided by operating activities was $302 million for the first six months, though negatively impacted by a $100 million voluntary pension contribution.