01—Abstract
Summary
Summary of the 10-K filed February 26, 1998. Cited figures are marked; the original filing is the authoritative source.
AlliedSignal Inc. reported 1997 net sales of $14.47 billiona, up from $13.97 billion in 1996, with net income of $1.17 billion, or $2.07 per share basic ($2.02 assuming dilution), compared with $1.02 billion, or $1.80 per share, in 1996.
Aerospace was the strongest segment, with net sales of $6.41 billionb and adjusted net income of $529 million, up 37% from 1996. Automotive sales declined 10% to $3.80 billion after the divestiture of the braking and safety restraints businesses, while Engineered Materials sales rose 6% to $4.25 billion. Reported net income includes a $250 million pretax provision for repositioning and other charges and a $226 million pretax net gain on business sales.
The company spent heavily on acquisitions in 1997, including Prestone, Grimes Aerospace, Astor and Holt Lloyd, and in January 1998 it acquired the Hardware Group and PacAero unit of Banner Aerospace for about $350 millionc. It also sold its automotive safety restraints business to Breed Technologies for $710 million in cash. Backlog for aerospace products reached $5.09 billion at year-end 1997, and the company anticipates that about $4.25 billion of it will be filled during 1998.
Total assets rose to $13.71 billiond, and shareowners' equity was $4.39 billion. Long-term debt as a percent of total capital fell to 19.7%, while total debt as a percent of total capital rose to 31.7%.
The company repurchased 21.0 million shares for $814 million in 1997 and approved a 15% increase in its quarterly dividend, from $0.13 to $0.15 per share, effective in the first quarter of 1998. Management expects aerospace earnings to remain strong and plans capital expenditures of about $700 million in 1998.
02—Key points
Key Highlights
- Net sales of $14.47 billion in 1997, up from $13.97 billion in 1996
- Net income of $1.17 billion, or $2.07 per share basic, up from $1.02 billion, or $1.80 per share
- Aerospace sales of $6.41 billion, up 12%, with adjusted net income up 37% to $529 million
- Automotive sales fell 10% to $3.80 billion after the braking and safety restraints divestitures
- Acquisitions in 1997 included Prestone, Grimes Aerospace, Astor and Holt Lloyd, with the Banner Aerospace units acquired in January 1998
- Aerospace backlog of $5.09 billion at year-end 1997; quarterly dividend raised 15% to $0.15 per share
- Repurchased 21.0 million shares for $814 million in 1997
03—Questions
Frequently Asked Questions
How did AlliedSignal's earnings change in 1997?
Net income rose 15% to $1.17 billion, or $2.07 per share basic, from $1.02 billion, or $1.80 per share, in 1996. The result includes a $250 million pretax repositioning and other charge and a $226 million pretax net gain on business sales. Excluding special items, net income was $1.166 billion, or $2.06 per share.
Which business segment drove the company's results?
Aerospace drove the results, with net sales up 12% to $6.41 billion and adjusted net income up 37% to $529 million. Engineered Materials sales rose 6% to $4.25 billion, while Automotive sales fell 10% to $3.80 billion, largely because of the divested braking and safety restraints businesses.
What major portfolio changes did the company make?
AlliedSignal sold its automotive safety restraints business to Breed Technologies for $710 million in cash and completed the 1996 sale of its braking business to Robert Bosch GmbH. It acquired Prestone, Grimes Aerospace, Astor and Holt Lloyd in 1997 and the Hardware Group and PacAero unit of Banner Aerospace in January 1998 for about $350 million.
What is the company's outlook and capital allocation plan?
Management expects aerospace earnings to remain strong and expects commercial aircraft activity to continue at high levels in 1998. The company projects 1998 capital expenditures of about $700 million, mainly funded internally. The quarterly dividend increases 15% to $0.15 per share starting in the first quarter of 1998.
How did the company's balance sheet and debt position change?
Total assets rose to $13.71 billion from $12.83 billion, and shareowners' equity reached $4.39 billion. Total debt was $2.31 billion, and total debt as a percent of total capital rose to 31.7% from 29.5%, while long-term debt as a percent of total capital fell to 19.7% from 22.2%.
04—Continue