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PPG Industries Annual Report, Year Ended Dec 31, 1993

Filing Date
Filed February 17, 1994
Period End
December 31, 1993
Security
PPG
In the record · 2016–202610-K1210-Q338-K141

PPG filed 12 annual reports (10-K), 33 quarterly reports (10-Q) and 141 current reports (8-K) between 2016 and 2026.

  1. FY2016 annual report10-K · Feb ’17Feb ’17
  2. Material agreement8-K · Sep ’19Sep ’19
  3. Leadership change8-K · Dec ’21Dec ’21
  4. Leadership change8-K · Dec ’25Dec ’25

01—Abstract

Summary

Summary of the 10-K filed February 17, 1994. Cited figures are marked; the original filing is the authoritative source.

PPG Industries, Inc. reported 1993 net sales of $5.75 billiona, essentially flat with $5.81 billion in 1992, with higher sales volumes offset by currency translation, lower chemicals and glass prices, and the absence of sales from divested businesses.

Operating income improved in coatings and resins ($419 millionb vs. $368 million) and glass ($200 million vs. $119 million), while chemicals declined to $138 million from $185 million. Gross profit as a percentage of sales rose to 37% from 36%. Net income fell to $22.2 million, or $0.21 per share, from $319.4 million, or $3.01 per share, in 1992.

The decline reflects a net charge of $272.8 millionc for three accounting changes (SFAS Nos. 106, 109 and 112), business divestiture and realignment charges of $126.4 million, and a $27.8 million gain on the sale of an interest in an insurance company. Income before accounting changes was $295.0 million, or $2.78 per share. Cash from operations rose to $740.7 million from $670.2 million, and dividends paid were $220.8 million.

The company is divesting its Biomedical Systems Division, with the medical electronics portion expected to close by the end of the first quarter of 1994 and the sensors business by the end of 1994. Environmental exposure remains a disclosed item: reserves for remediation were $90 milliond at December 31, 1993, and management believes expenditures will not have a material adverse effect on financial position, operating earnings or liquidity. Total debt, including capital leases, was 31% of total debt and equity at year-end 1993, versus 33% a year earlier.

02—Key points

Key Highlights

  1. Net sales of $5.75 billion in 1993, versus $5.81 billion in 1992.
  2. Net income of $22.2 million ($0.21 per share), after a $272.8 million net charge for accounting changes, compared with $319.4 million ($3.01 per share) in 1992.
  3. Income before accounting changes of $295.0 million ($2.78 per share).
  4. Coatings and resins operating income rose to $419 million from $368 million; glass rose to $200 million from $119 million; chemicals fell to $138 million from $185 million.
  5. Business divestiture and realignment charges of $126.4 million in 1993, including $38 million for the Biomedical Systems Division divestiture.
  6. Cash from operations of $740.7 million, up from $670.2 million; dividends paid of $220.8 million.
  7. Environmental reserves of $90 million at December 31, 1993, down from $107 million a year earlier.

03—Questions

Frequently Asked Questions

  1. Why did PPG's net income fall so sharply in 1993?

    Net income was $22.2 million, down from $319.4 million, mainly because of a $272.8 million net charge for three accounting changes adopted January 1, 1993 (SFAS Nos. 106, 109 and 112). Business divestiture and realignment charges of $126.4 million also weighed on results. Excluding the accounting change charge, income before accounting changes was $295.0 million, or $2.78 per share.

  2. Which business segments drove operating performance in 1993?

    Coatings and resins operating income rose to $419 million from $368 million, and glass operating income increased to $200 million from $119 million, aided by higher volumes and the absence of the prior year's glass technology award charge. Chemicals operating income declined to $138 million from $185 million, due to lower sales prices and inflation, particularly on natural gas costs.

  3. What is PPG doing with the Biomedical Systems Division?

    PPG decided in the fourth quarter of 1993 to divest the Biomedical Systems Division. The sale of the medical electronics portion is expected to be completed by the end of the first quarter of 1994, and the remaining sensors business is expected to be sold by the end of 1994. The decision carried a pretax charge of $38 million.

  4. How strong is PPG's cash generation and balance sheet?

    Cash from operations was $740.7 million in 1993, up from $670.2 million in 1992. Total debt, including capital leases, was 31% of total debt and equity at December 31, 1993, compared with 33% at December 31, 1992. Cash and cash equivalents rose to $111.9 million, and the company said cash from operations and debt capacity are expected to remain sufficient to fund capital spending and dividends.

  5. What environmental liabilities does PPG face?

    PPG is negotiating with government agencies concerning 75 National Priority List and other cleanup sites. Reserves for environmental remediation were $90 million at December 31, 1993, versus $107 million a year earlier. Management believes future expenditures will not have a material adverse effect on the company's financial position, operating earnings or liquidity.

04—Continue

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